If you are experienced or new to the world of trading, you may have heard the term bullish divergence. in short, bullish divergence is a valid trading signal.
In general, this principle helps give an idea of when market behavior will continue, decrease, or even reverse (change). Divergence itself has two types, namely bullish divergence and bearish divergence.
Traders when they want to make trading decisions, must always see this pattern. For those who don't know very well, consider the details of this pattern.
Definition of Bullish Divergence
According to bluffx.co.uk, bullish divergence is a pattern that occurs when the price falls to its lowest point. Meanwhile, the pattern on the chart has reached its high point.
This is seen as a sign that the market is strengthening. Also, it indicates that the price will soon start to catch up with the show.
Weaknesses in using bullish divergence, one of which is not being able to provide trading signals correctly. This situation is the first signal that you should bet on an upward movement.
It should be noted that indicators are used to carry price instructions. In this way, if the indicator goes up, it means that the price should also go up.
Trading Tricks When You're Bullish Divergence
To make a decision trading which one is better, it is important to understand how to tell the difference. If you know how, it will be easier for you to recognize different trading patterns and market conditions.
Entering the market at the right time is one of the keys to achieving potential success. The reason is, rushing into making decisions can actually cause problems. It is important to be patient to ask for crypto price confirmation. Price confirmation usually occurs when the price crosses the normal range.
Another important thing is when the price breaks the support and stop levels. If you see one of these confirmations, it's a good time to enter a trade.
In addition, you can also place stops above the upper limit and below the lower limit of the reversal. Placing a stop loss can help you stay on the safe side to avoid negative price moves.
One way to get good returns and trade spreads is to set reasonable and prudent profit targets. The best method one can use to determine this value is to create an icon.
Also read: 4 Terra Luna Trading Places You Need to Note
Types of Bullish Divergence
This pattern itself has two forms that can be found in drawing charts, namely moving all the time in devengenance.
This pattern itself is divided into two different types, namely the regular bullish swing and the regular bearish swing. In fact, both have an important function of showing price fluctuations.
The regular bullish divergence itself occurs when the actual price shows a lower low than the high indicated on the indicator.
Then hidden divergence also has two types, namely Concealed Bullish Divergence and Concealed Bearish Divergence.
Here, hidden discrepancies always oppose discrepancies and indicate that the downward trend has ended and this trend can continue.
A hidden bullish trend itself occurs when the true price of a stock shows a higher price relative to the indicator's lower low. Meanwhile, various changes indicate changes to the future or at least a return to the bearish trend.
Also read: Best Crypto Trading Platform, Must Know!
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