Divergence, which is a term that technicians use when two or more averages or indices fail to show confirming trends, is one of the mainstays of technical analysis.
Barbara Star offers a new way to use oscillators and divergence as well as methods to locate entry levels during a trend. Most technical indicators mirror or confirm price movement. When price moves up, the indicator moves up; when price moves down, the indicator moves down. Sometimes, however, a discrepancy occurs between price and indicator movement. That discrepancy is known as "nonconfirmation" and can be seen most clearly on overbought or oversold indicators as well as on indicators that move above or below a zero line.
Ms Star goes on to say, "Many traders only learn to recognize the type of nonconfirmation that occurs at market tops and bottoms, which is the classic divergence. But there are other forms of nonconfirmation I call hidden divergence (HD) that, when present, offer additional profit potential" ... download the eBook to read more
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