What's Divergence Indices?
What is Divergence Indices Definition? - Divergence is a stock indices trading setup used by Indices traders - divergence indices trading involves looking at a indices chart and a indices indicator - for example MACD indicator.
To find this divergence indices trading setup find two chart points which stock indices price makes a new swing high or a new swing low but the MACD 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 Divergence Stock Indices 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 MACD indicator we check highs made by MACD technical indicator, these are highs which are directly below the Chart points marked A and B.
We then draw one line on the stock indices chart & another line on the MACD indicator.
Divergence Indices Signals - What's Divergence Stock Indices Meaning? - What's Divergence Indices Definition?
The indices chart above shows an example of hidden bearish divergence indices setup.
What is Divergence Stock Indices Trading?
In order to trade divergence stock indices signal we look for the 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 Divergence Indices?
M shapes on Indices charts dealing with Stock 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 Divergence Stock Indices? - What is Bullish Indices Divergence Trading? - What is Divergence Stock Indices Meaning? - What's Divergence Indices Definition?
