Does this count as divergence?

timsk

Legendary member
7,604 2,377
Greetings!

Does this count as divergence setup or does it strictly have to be a tangent line between tops or bottoms? Meaning that it's forbidden to draw lines through tops/bottoms to another top/bottom?
[img=http://s16.postimg.org/flkqlmkk1/Valid_divergence.jpg]
Is it valid?

Thanks a lot!
Hi Swephoenix,
As a general rule of thumb, the only 'strictly' that applies to just about any aspect of trading is the one you define for yourself. So, you can draw lines wherever you want. That said, in the chart you've attached, that's a clear example of divergence in my book, as price has made a lower high and the indicator below has made a higher high. Whether or not it's meaningful in any way is another matter entirely!
Tim.
 

Swephoenix

Newbie
3 0
Hi Swephoenix,
As a general rule of thumb, the only 'strictly' that applies to just about any aspect of trading is the one you define for yourself. So, you can draw lines wherever you want. That said, in the chart you've attached, that's a clear example of divergence in my book, as price has made a lower high and the indicator below has made a higher high. Whether or not it's meaningful in any way is another matter entirely!
Tim.

Thanks a lot Timsk! Really appreciate your quick response! :clap:
 
 
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