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Divergence Cheat Sheet

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					Divergence Cheat Sheet

Let's review!

There are two types of divergences:

Regular divergence
Hidden divergence
Each type of divergence will contain either a bullish bias or a bearish
bias.

Since you've all be studying hard and not been cutting class, we've
decided to help y'all out (cause we're nice like that) by giving you a
cheat sheet to help you spot out regular and hidden divergences quickly.

Type Bias Price Oscillator Description Example
Regular    Bullish     Lower Low Higher Low Indicates underlying
strength. Bears are exhausted.
Warning of possible trend direction change from downtrend to uptrend.

Bearish    Higher High Lower High Indicates underlying weakness. Bulls
are exhausted.
Warning of possible trend direction change from uptrend to downtrend.

Hidden     Bullish     Higher Low Lower Low Indicates underlying
strength. Good entry or re-entry. Occurs during retracements in an
uptrend. Nice to see during price retest of previous lows. "Buy the dips"

Bearish    Lower High Higher High Indicates underlying weakness. Found
during retracements in a downtrend. Nice to see during price retests of
previous highs. "Sell the rallies"



Whew! That's quite a lot to remember, isn't it? We'll give you two
options:
You can write this all down in your palm and look back on it while
trading. If you're the type who gets sweaty palms when you're nervous, we
wouldn't recommend this.
You can simply bookmark this page and just revisit it when you mix up
those higher lows, lower highs, lower lows, and higher highs. You don't
want to make a wild guess while coming up with a trade, do you?


Read more: http://www.babypips.com/school/divergence-cheat-
sheet.html#ixzz1Z0JYrV5W

				
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