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Stochastic Oscillator Bullish Gold Divergence and Bearish Divergence Gold Trading

Divergence gold trading is one of the gold trading signals that can be generated when using the stochastic oscillator gold trading indicator.


Divergence gold trading is a signal that a rally or retracement is losing steam and is likely to reverse. It means that the last buyers or last sellers are pushing the gold trading price in one way while the majority of other gold traders have stopped trading in that direction and are cautious of a gold trading price correction or retracement.



There are 4 types of gold trading divergence trading setups

Example 1: Classic Gold Bullish Divergence


A Gold Classic Bullish Divergence in the stochastic oscillator indicator and the gold trading price is followed by a rise in gold trading price.

 Stochastic Oscillator Gold Trading Indicator Classic Gold Bullish Divergence

Stochastic Oscillator Gold Trading Indicator Classic Gold Bullish Divergence


When the gold trading price is making new lows the Stochastic gold trading indicator is not moving past its previous lows it is an indication that the downward gold trading trend is about to reverse and a bullish gold trading rally is likely to occur.



In the gold trading example above the gold trading price set a new low but it was not coupled with a new low in the measure of Stochastic oscillator gold trading indicator, when gold trading price formed a new low then the stochastic gold trading indicator should have followed suit, but the stochastic indicator did not therefore the gold trading classic divergence trading setup.


Gold classic divergence trading setup is even stronger because there is combination of a divergence gold trading trade setup and then followed by a rise above the 20% indicator level. This combines the Overbought and Oversold levels with this gold trading divergence trading setup.

 

Example 2: Classic Gold Bearish Divergence


A Classic Gold Bearish Divergence trading setup in the stochastic oscillator gold trading indicator and the gold trading price is followed by a drop in gold trading price.

Stochastic Oscillator Gold Trading Indicator Classic Gold Bearish Divergence

Stochastic Oscillator Gold Trading Indicator Classic Gold Bearish Divergence

 

When gold trading price is making new highs but the Stochastic oscillator gold trading indicator is not moving beyond its previous high it is an indication the upward gold trading trend will reverse and that a gold trading bearish divergence trade setup will follow.


This classic gold trading bearish divergence trade setup is even stronger because there is a combination of a gold trading divergence with a dip below the overbought 80 level.

 

Example 3: Hidden Gold Bullish Divergence


Hidden Gold Bullish Divergence trade setup signifies a retracement in an upward gold trading trend. This gold trading hidden divergence trading setup is the best type of gold trading divergence setup to trade, because you are not trading a gold trading price reversal, but you are trading within the direction of the Gold trend.

Stochastic Oscillator Gold Trading Indicator Hidden Gold Bullish Divergence

Stochastic Oscillator Gold Trading Indicator Hidden Gold Bullish Divergence


Even though, the stochastic oscillator gold trading indicator made a lower low the gold trading price low was higher than the previous low (higher low). This means that even though the gold trading sellers made a good attempt to push gold trading price down as indicated by the stochastic indicator, this was not reflected on the gold trading price, and the gold price did not make a new low. This is the best place to open a buy gold trading trade, since it is even in an upward gold trading trend there is no need to wait for a confirmation gold trading signal, because you are buying in an upward Gold trend.



Example 4: Hidden Gold Bearish Divergence


Hidden Gold Bearish Divergence trading setup signifies a retracement in a downward gold trading trend.

Stochastic Oscillator Gold Trading Indicator Hidden Gold Bearish Divergence

Stochastic Oscillator Gold Trading Indicator Hidden Gold Bearish Divergence

 

Hidden gold trading bearish divergence gold trading setup is the best type of divergence to trade, because you are not trading a gold trading price gold trading trend reversal, but you are trading within the direction of the gold trading trend. This is the best place to open a sell gold trade, since it is even in a downward gold trading trend there is no need to wait for a confirmation gold trading signal, because you are selling in a downward Gold trend.

 

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