Divergence Example

TraderCobb uses very few indicators, he keeps his charts very clean. In this video he shows how he uses the MACD looking at divergence. Be sure to subscribe at www.tradercobb.com and don’t forget to share this content with everyone you know!

By Trader Cobb -

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G’Day everybody it’s Trader Cobb here. Don’t forget to follow me on twitter @TraderCobb C O double B and also visit Tradercobb.com for all of your trading education and crypto. So guys, here’s a little quick lesson for you.

Keep it short and sharp. It’s about how to find where trend may be starting to weaken and lose its momentum. So I’m looking here at Bitcoin right now as you can see prices pushed on up. We’ve had a phenomenal run here on Bitcoin and we’re looking at the daily timeframe.

What I come down and do is have a look at the 4 hour time frame as that’s the step below on this example of the daily. And what I’m looking for is convergence of the indicators. Now I just use the MACD as an example because I tend to just focus on the MACD.

If you have a look here as prices pushing up higher high, higher high, higher high, so too is the MACD. Okay? Now if you have a look at what’s happened over here, just recently a new recent higher high. So this is the higher high to the previous.

This was the previous higher high, this is the new higher high notice that the MACD is not actually creating higher highs as well. Now that being said, this is not a reason for me to go short. This is not a reason for me to necessarily exit the trade.

What it does do for me is it gives me a bit of a reason maybe not to look too many longs at the moment. It’s not to say Bitcoin won’t move high because we know that it has a mind of its own. It’s just that I much prefer to be trading through nice smooth flowing trends just like what we saw in that last push up before it got a bit out of control.

So that’s like a quick little tip on divergence. Divergence is when the price is making new highs in this example and in the MACD here is not. That is divergence of price. Guys, don’t forget to follow me on twitter @TraderCobb C O double B and visit tradercobb.com.

Speak to you all soon. Bye for now. This show is proudly sponsored by coinspot.com.au.

With the largest range of cryptocurrencies anywhere in the Australian market. With an updated verification process you can now be verified using only your driver’s license or passport within seconds. You can instantly deposit funds and instantly start buying and selling your favorite cryptocurrencies in under five minutes.

Coinspot are giving away $10 worth of free bitcoins for each verified user. Once they make their first deposit, just go to coinspot.com.au/BTC123. Views are of the advertiser not Trader Cobb or the audio presenter.

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