How Do I Read Divergence?
How Do You Interpret Divergence in XAUUSD Trading? - Divergence xauusd trading setup is one of the gold trading strategy used by traders - divergence gold trading involves looking at a gold chart & one more gold indicator. For our gold divergence example we shall use the MACD xauusd technical indicator.
To identify this gold divergence setup find 2 chart points at which he xauusd price makes a new swing high or a new swing low but the MACD technical indicator does not, thus illustrating a xauusd trading divergence between the xauusd price & momentum.
To look for divergence gold signal we look for 2 chart points on a gold chart - two xauusd price highs which form an M shape on the xauusd chart or two xauusd price lows that form a W-Shape on the xauusd chart. Then look for the same M-shape or WShape on the technical indicator that you use to trade gold - for examples RSI indicator or MACD xauusd technical technical indicator.
Example of a XAUUSD Divergence Trade Setup:
In the xauusd chart below we spot two chart points, chart point A and chart point B - swing highs. These 2 chart points form an M-shape on the xauusd chart.
Then using MACD xauusd technical technical indicator we check the highs made by the MACD technical indicator, these are the highs that are directly below Chart point Marked A and Chart point Marked B.
We then draw one line on the xauusd chart & another line on the MACD technical indicator.
How Do You Interpret Gold Trading Divergence Setup? - How Do You Read Divergence in Gold Trading?
The gold chart above shows example of one of the 4 different types of gold divergence trading setups, the gold divergence trading setup above is known as hidden bearish gold divergence.
How to Read divergence gold trading setup
In order to Read divergence xauusd 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 - 2 lows but the last one is higher
- LL - Lower Low - two lows but the last one is lower
First let us look at the explanation of these gold divergence trading terms:
How to Read XAUUSD Price Highs
How Do You Interpret Gold Trading Divergence Setup? - How Do You Read Divergence in Gold Trading?
How to Read XAUUSD Price Lows
How Do You Interpret Divergence Gold Trading Signals? - How Do I Read Different Types of Gold Divergence Signals?
How Do You Read Divergence in Gold Trading?
How Do You Interpret Divergence Gold Trading Signals? - How Do I Read Different Types of Gold Divergence Signals?
How Do You Read Divergence in XAUUSD Trading?
How Do You Interpret Divergence Gold Trading Signals? - How Do I Read Different Types of Gold Divergence Signals?
Now that you have known the gold divergence trading terms used to explain divergence gold trading setup. There are 2 different types of gold trading divergences which are:
- Classic Gold Divergence
- Hidden Gold Divergence
Classic divergence trading setup and hidden divergence setup are explained on the learn gold trading guides located in the main navigation menu of this learn gold website - under topics learn gold trading lessons.
How Do You Interpret XAUUSD Divergence Signals?
