Trade Stock Indices

Types of Divergence Indices

Types of Divergence Indices Definition - Divergence is a stock indices trading setup used by Indices traders - divergence indices trading involves looking at a indices chart & a indices indicator - for example MACD indicator.

To find this divergence indices trading setup find two chart points which stock indices price makes a new swing high or a new swing low but the MACD indicator does not do the same, this indices signals a divergence between stock indices price & MACD technical indicator momentum.

For a divergence stock indices setup we look for 2 chart points, two highs that form an M-shape on stock indices chart or two lows that form a WShape on stock indices chart. Then look for the same M-shape or WShape on Indices MACD indicator.

Example of a Divergence Stock Indices Trade Setup:

In the stock indices chart below we spot 2 chart points, point A and point B (swing highs). These 2 chart points form an M-shape on trading stock indices price chart.

Then using MACD indicator we check highs made by MACD technical indicator, these are highs which are directly below Chart points marked A and B.

We then draw one line on the stock indices chart & another line on the MACD indicator.

Types of Divergence Index - Types of Divergence Index - Stock Indices Trading Divergence Setup Explained

Divergence Indices Trading Signals - Types of Divergence Stock Indices Definition - Types of Divergence Indices Definition

The indices chart above shows an example of hidden bearish divergence indices trading setup.

hat is Divergence Indices Trading Types of Divergence Indices

In order to trade divergence stock indices signal we will 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 - 2 lows but the last one is higher
  • LL : Lower Low - two lows but the last one is lower

Divergence Indices Trading Terms Definition: Different Types of Divergence Indices Trading - Types of Divergence Indices

M shapes on Indices charts dealing with Stock Indices price Highs

Types of Bearish Divergence Indices Trading - Types of Divergence Stock Indices

W Shapes on Indices charts dealing with Stock Indices price lows

Different Types of Divergence Stock Indices Trading - Types of Bearish Divergence Stock Index Trading

Example of M Shapes on Stock Indices Charts - Types of Bearish Divergence Indices Trading

Different Types of Divergence Indices Trading - Divergence Strategies Stock Indices Setups

Examples of W Shapes on Stock Indices Charts - Types of Bearish Divergence Indices Trading

Types of Bearish Divergence Trading Indices - Types of Divergence Stock Index

Types of Divergence Stock Indices - Types of Bullish Divergence Indices Trading - Types of Divergence Stock Indices Definition - Types of Divergence Indices Definition

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