Divergence Questions

Discussion in 'Technical Analysis' started by hagadol, Mar 13, 2005.

  1. hagadol

    hagadol New Member

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    The examples in 1 through 4, are discussed with peaks, though they could be troughs.

    My queries are not oscillator specific, though I am currently using MACD Histogram, CCI and RSI.

    1. Non Sequential Divergence - There are 3 peaks in your oscillator. There is divergence with price if measured between peaks 1 and 3, though there is a much smaller peak 2 in between. Do the two Oscillator peaks have to be sequential (one after the other) or can the be interrupted by the lesser peak that exists in between ?

    2. Is there a difference if the oscillator does or does not go across the zero (middle line) in between the peaks you are measuring

    3. Same Peak Divergence - How strong is this signal ? When there is divergence between price and the oscillator's current peak only. Price trends higher, the current peak gets shorter. Often noticed in MACD Histogram.

    4. Double Divergence (3 Peaks) - If there is divergence with 3 peaks (or more) in sequence, is that considered stronger than 2 ?

    5. Hidden Divergence - Is my understanding correct ? - Price starts a move long, when it retraces, the oscillator trough is lower than that at the beginning of the move long. This would signal a continuation of trend, subject to other supporting evidence ?
     
  2. Traderji

    Traderji Super Moderator

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    Hello hagadol,

    Welcome to Traderji.com

    Please read this thread on convergence and divergence where there is a discussion on different types of divergences.
     
  3. sudoku1

    sudoku1 Well-Known Member

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