Gold with Divergence in MetaTrader 4 MT5 Download
Divergence Gold Setup is one of the trade set-ups used by traders. It involves looking at a chart and one more technical indicator. For our example we shall use the MACDxauusd indicator.
To spot this xauusd divergence trading setup find 2 chart points at which xauusd price makes a new swing high or a new swing low but the MACD indicator does not, indicating a divergence between price & momentum.
To look for divergence setup we look for 2 chart points, 2 highs that form an M-shape on the chart or 2 lows that form a W-Shape on the chart. Then look for the same M shape or W shape in the indicator you use to trade.
Example of a Trade Divergence Setup:
In the chart below we identify two points, point A and point B (swing highs). These two chart points form an M shape on the price chart.
Then using MACD technical indicator we check the highs made by MACD technical indicator, these are the highs that are directly below Chart points A and B.
We then plot one line on the chart & another line on the MACD technical indicator.
Drawing Gold Trade Divergence Lines
The chart above displays example of one of the four types of trade divergence setups, the one divergence set up above is known as hidden bearish xauusd divergence setup, one of the best type to trade. Types of gold trading divergences are covered in the next learn gold guide lesson.
How to spot trade divergence setups
In order to identify divergence setup we check for the following:
- HH = Higher High - two highs but the last is higher
- LH = Lower High - 2 highs but last one is lower
- HL=Higher Low : two lows but the last is higher
- LL = Lower Low- two lows but the last is lower
First let us look at the illustrations of these divergence terms:
M shapes dealing with price Highs
W Shapes dealing with price lows
Example of M shapes on Charts
Examples of W Shapes on Charts
Now that you have learned the divergence terms that are used to explain divergence gold trading set-up. Let us look at the two types of divergences & how to trade these chart setups.
There two types are:
- Classic Divergence Gold Trade Setups
- Hidden Divergence Gold Trade Setups
These two setups are described on following guides below
Gold with Divergence in MetaTrader 4 MT5 Download - Gold with Divergence in MetaTrader 4 MT5 Platform PDF Free Download - MT4 Platform MetaTrader 5 Divergence Gold Guide.
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- How to Trade Hidden Bullish & Hidden Bearish Trading Divergence on Gold Charts
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- How Do You Trade Fib Expansion Levels in Gold?
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