Do you know about market divergences?

Posted on by The INO.com Team

In the market there are two types of market divergences that can occur: a bullish divergence and a bearish divergence. Both of these divergences are important and you need to know how they work and how you can benefit from this knowledge.

In this short educational trading video, I will show you the tools I use to spot market divergences. We will be using the Relative Strength Indicator (RSI) and the Moving Average Convergence Divergence indicator (MACD) which was developed by a friend and mine, Gerald Appel.

As always our videos are free to watch and there are no registration requirements. If you would like to comment on this or any of our other videos, please feel free to do so on our Trader's Blog.

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

8 thoughts on “Do you know about market divergences?”

  1. Adam -

    A great video and for free! I paid $4000 for a pretty good technical analysis and trading education but never this subject. There's a subtle and yet simple art to reading indicators and this is a bread and butter but very important!

    I use divergence to keep myself in the trade when things are working against me. They can be used to buttress my original analysis which is sometime tough to stick to.

  3. Dear Adam,

    Thank a lot for your perfect videos!!!!

    I was trying to use Divergences a while ago,but I could not do right for some reason..., I read it 80% wrong. Watching your video I (probably)did not find any new for me,BUT when I returned to market I looked on it from other prospective and now I 80% right!!! Really I opened already one position which is in +, hope everything will work as good as I see it now.!
    Thanks a lot!

    Regards.

  4. Nice video but it is important to realize that divergences can stay in place for a long time before it is confirmed by a trend change. That is, one simply SHOULD NOT trade against the existing trend due to divergence signal; he should wait until there is an indication of trend change, then trade. Divergence signals are not trade signals, rather they are "watch" signals.

      1. Hi Adam,

        Thanks for the RSI settings. Can you share your MACD settings. I remember you did share them in a earlier blog and I tried searching the blog without any success. I would appreciate you sharing the MACD setting if possible.

        Thanks,
        trikaal

        1. Trikaal,

          Thank you for your feedback.

          Here are the MACD settings I use:

          Fast Slow Periods 1-26
          Signal Period 9

          All the best,

          Adam

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