Gold Divergence Trader Strategies

Divergence Trader Strategies is one of the trade set-ups used by Gold traders. It involves looking at a gold chart & one more gold indicator. For our examples we shall use the MACD technical indicator.

To spot this divergence trader strategies find two chart points at which xauusd trading price makes a new swing high or a new swing low but the MACD indicator does not, indicating a divergence between xauusd price & momentum.

To look for Divergence trader strategies we look for two chart points, two highs that form an M-shape on the XAUUSD chart or 2 lows that form a WShape on the Gold chart. Then look for the same M-shape or WShape on the Gold indicator you use to trade.

Example of a XAUUSD Divergence Trade Strategies:

In the Gold chart below we spot 2 chart points, point A and point B (swing highs). These 2 points form an M-shape on the xauusd trading price chart.

Then using MACD indicator we check the highs made by the MACD, these are the highs that are directly below Chart points A & B.

We then draw one line on the XAUUSD chart & another line on the MACD indicator.

Drawing Divergence Gold Lines - Divergence trader strategies

The XAUUSD chart above shows example of one of the four types of divergence trader strategies, the one above is known as hidden bearish divergence strategy, one of the best type to trade.

How to spot divergence trader strategies

In order to spot Gold Divergence trader strategies we look for the following:

• HH=Higher High- 2 highs but the last one is higher
• LH= Lower High- two highs but the last one is lower
• HL=Higher Low- two lows but the last one is higher
• LL= Lower Low- two lows but the last one is lower

First let us look at the illustrations of these divergence set up trading terms:

M-shapes dealing with XAUUSD price Highs

Divergence trader strategies

W Shapes dealing with Gold price lows

Divergence trader strategies

Example of M Shapes

Divergence trader strategies

Examples of W Shapes

Divergence trader strategies

Now that you have learned the Divergence trader strategies terms that are used to explain set-up. Let us look at the two types of Gold divergences and how to trade these divergence trader strategies setups.

There two types are:

1. Classic divergence trader strategies

2. Hidden divergence trader strategies

These 2 setups are the most commonly used divergence trader strategies & these are explained on the gold trading strategies section of this site.