Divergence Trader Strategies
Divergence Trader Strategies is one of the trade setups used by Silver traders. It involves looking at a silver chart & one more silver indicator. For our example we shall use the MACD indicator.
To spot this divergence trader strategies find two chart points at which xagusd trading price makes a new swing high or a new swing low but the MACD indicator doesn't, indicating a divergence between xagusd price & momentum.
To look for Divergence trader strategies we look for two chart points, two highs that form an M-shape on the XAGUSD chart or 2 lows that form a WShape on Silver chart. Then look for the same M-shape or WShape on the Silver indicator you use to trade.
Example of a XAGUSD Divergence Trade Strategies:
In the Silver chart below we identify 2 chart points, point A & point B (swing highs). These two points form an M-shape on the xagusd trading price chart.
Then using MACD technical indicator we check the highs made by the MACD, these are highs which are directly below Chart points A & B.
We then draw one line on the XAGUSD chart & another line on the MACD indicator.
Drawing Divergence Silver Trading Lines - Divergence trader strategies
The XAGUSD chart above shows an example of one of the 4 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 Silver 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 setup trading terms:
M-shapes dealing with XAGUSD price Highs
Divergence trader strategies
W Shapes dealing with Silver price lows
Divergence trader strategies
Example of M Shapes
Divergence trader strategies
Examples of W Shapes
Divergence trader strategies
Now that you've learned the Divergence trader strategies terms that are used to explain setup. Let us look at the two types of Silver divergences and how to trade these divergence trader strategies setups.
There two types are:
- Classic divergence trader strategies
- Hidden divergence trader strategies
These two setups are the most commonly used divergence trader strategies and these are explained on the silver trading strategies section of this website.
