How Do You Interpret Gold Trading Divergence & Trade Divergence Setups?
How Do I Analyze XAUUSD Trading Divergence & Trade Divergence Setups in XAUUSD Trading?
Divergence Gold Definition - Divergence gold trading is one of the gold trading setups used by Gold traders. Divergence gold trading involves looking at a gold chart & one more gold indicator. For our divergence xauusd examples we shall use the MACD xauusd technical indicator.
To spot this xauusd trading divergence setup find two chart points at which xauusd price makes a new swing high or a new swing low but the MACD indicator does not, indicating a xauusd trading divergence between xauusd price and momentum.
To look for divergence gold signal we look for 2 chart points, two highs that form an M shape on the gold chart or 2 lows that form a W-Shape on the xauusd chart. Then look for the same M-shape or WShape on the gold indicator that you use to gold trade - for examples RSI indicator, MACD indicator or Stochastic Oscillator xauusd trading technical indicator.
Example of a Gold Divergence Trade Setup:
In the gold chart below we identify 2 chart points, point A and point B (swing highs). These two chart points form an M-shape on the xauusd price chart.
Then using MACD technical indicator we check the highs made by the MACD technical indicator, these are the highs that are directly below gold Chart points A & B.
We then draw one line on the gold chart & another line on the MACD xauusd trading technical indicator.
Drawing Divergence Gold Lines - Gold Divergence Strategy - Gold Trading Divergence Entry and Exit
The gold chart above shows example of one of the four types of xauusd trading divergence setup, the one above is known as hidden bearish gold divergence. Types of xauusd trading divergence set ups are covered in the next learn gold trading lesson.
Trading Gold spot divergence gold trading setup
In order to spot XAUUSD divergence signal we look for the following:
- HH - Higher High - two 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 gold trading terms:
M shapes on XAUUSD charts dealing with Gold price Highs
W Shapes on XAUUSD charts dealing with Gold price lows
Example of M Shapes on XAUUSD Charts
Examples of W Shapes on Gold Charts
Now that you have learned the divergence gold trading terms that are used to explain divergence gold trading set-up. Let us look at the two types of gold trading divergences and how to gold trade these xauusd trading divergence chart setups.
The two gold divergence types which are:
- Classic Gold Divergence
- Hidden Gold Divergence
These two xauusd trading divergence set ups - classic divergence trading & hidden divergence trading are described on the learn gold tutorials in the gold lessons tutorials on this learn gold trading website located at the navigation menu under the topics learn gold trading lessons.
How Do I Read Gold Trading Divergence & Trade Divergence Setups in Gold Trading?
