in this article i want to share the way I use divergence, thought in a particular way
Fundamentals
My personal preference to find this opposite is stochastic
I simply use it to understand if the market doing something opposite than the indicator is telling me to do
When it comes to guess we want to plot areas where the indicator and the price are not lined up
On this chart we have a high area making a lower high, on the indicator we have a high practically making a slightly lower high
It is practically the same thing
On this one we have a high going down to a lower high, on the indicator the trend is going high
How to connect?
The way I do it is: in an uptrend, if the market is recently going up wards, and it coming to come back down we want to connect our highs
In an uptrend i connect my highs
In a downtrend I connect my lows
These opposites basically indicates that is market is getting ready for an inverse
What is the best way to figure out where the opposite actually occurs?
I put a horizontal line in the area we are going to plot the high from and o horizontal one in the same area in the indicator
Has the line ever bean breach?
And I do the same thing with the indicator has t…
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