When looking for divergence between price and an indicator (e.g., MACD, Stochastic, CCI, RSI) what we are looking for first is for the price to match or exceed the previous pivot high or low. It is the easiest if we examine just successive pivot point highs or lows and only two extremes at a time. The pair must include the peak or valley representing the current price action. Only in theseconditions is the first prerequisite met. Failure to meet or exceed the previous extreme invalidates searching for divergence.
Source: Todd Fiegel
Source: Todd Fiegel
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