What's Indices Divergence?
What is Divergence Indices Definition? - Divergence is a stock indices trading setup used by Indices traders -indices divergence trading involves looking at a indices chart and a indices indicator - for example MACD indicator.
To find this indices divergence trading setup find two chart points which stock indices price makes a new swing high or a new swing low but the MACD technical indicator does not do the same, this indices trading signals a divergence between stock indices price & MACD technical indicator momentum.
For a divergence stock indices trading setup we look for 2 chart points, two highs that form an M-shape on stock indices chart or two lows that form a WShape on stock indices chart. Then look for the same M-shape or WShape on Indices MACD indicator.
Example of a Stock Indices Divergence Trade Setup:
In the stock indices chart below we spot two chart points, point A and point B (swing highs). These 2 chart points form an M-shape on trading stock indices price chart.
Then using indices MACD technical technical indicator we check the highs made by the MACD technical indicator, these are highs that are direct below Chart points marked A and B.
We then draw one line on the stock indices chart & another line on the MACD indices technical technical indicator.
Divergence Indices Signals - What's Divergence Stock Indices Meaning? - What's Divergence Indices Definition?
The indices chart above shows example of hidden bearish indices divergence.
What is Divergence Indices Trading?
In order to trade Stock Indices divergence signal we look for following:
- HH : Higher High - two highs but the last one is higher
- LH : Lower High - 2 highs but the last one is lower
- HL : Higher Low - two lows but the last one is higher
- LL : Lower Low - 2 lows but the last one is lower
Divergence Indices Trading Terms Definition: What is Divergence Indices Trading? - What is Indices Divergence?
M shapes on Stock Indices charts dealing with Indices price Highs
W Shapes on Stock Indices charts dealing with Indices price lows
Example of M Shapes on Stock Indices Charts - What's Bearish Divergence?
Examples of W Shapes on Indices Charts - What's Bearish Divergence?
What is Divergence Indices Trading? - What is Indices Divergence? - What's Bullish Indices Divergence? - What is Divergence Stock Indices Meaning? - What's Divergence Indices Definition?
