If price is making a higher high and oscillator is making lower high then we have a bearish classic divergence. If price is making a lower low and oscillator making higher low, then we have a bullish classic divergence. If price is making a higher high and oscillator is making lower high then we have a bearish classic divergence. If price is making a lower low and oscillator making higher low, then we have a bullish classic divergence. CLASSIC DIVERGENCIES WILL LEAD US TO PRICE REVERSALS.
iF price is making a higher low and oscillator making lower low then we have a bullish hidden divergence. If price is making lower high and oscillator is making higher high then we have bearish hidden divergence. HIDDEN DIVERGENCIES WILL LEAD US TO PRICE CONTINUATION TREND.
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I will be providing a trading plan on how to trade classic and hidden divergencies.
Apply stochastic of 30,18,8 to a 30min chart and you will have divergencies as indicated below.
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