Learn To Spot Divergences. How Do Traders Use It? RSI MACD Williams%R

Interested in learning how to trade indicator divergences? Jake from TrendSpider dives into what to look for, popular indicators, and best use cases that may help you spot and trade divergences in this edition of our Technical Analysis series.

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What is a Divergence in trading?

Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data.

RSI Indicator

The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.

MACD

Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. A nine-day EMA of the MACD called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals.

Williams%R

Williams %R, also known as the Williams Percent Range, is a type of momentum indicator that moves between 0 and -100 and measures overbought and oversold levels.

[andrel]

great great video! so much valuable information. Thanks so much for sharing!

[paulkaz]

Nice video. Can you set the alert to scan more than one stock? For example, could it scan the whole S&P 500 for that particular divergence.