What are the differences between hidden divergence and regular divergence in the context of cryptocurrency trading?
Sai SathwikDec 26, 2021 · 3 years ago1 answers
Can you explain the distinctions between hidden divergence and regular divergence in the context of cryptocurrency trading? How do they affect trading decisions?
1 answers
- Dec 26, 2021 · 3 years agoHidden divergence and regular divergence are two terms that traders often encounter in the context of cryptocurrency trading. While both types of divergence can indicate potential trend reversals, they have some distinct characteristics. Regular divergence occurs when the price of a cryptocurrency moves in the opposite direction of an indicator, such as the RSI. This can signal a weakening trend and a possible reversal. On the other hand, hidden divergence occurs when the price makes a higher high or lower low, but the indicator fails to do the same. This suggests that the trend is likely to continue. Traders can use regular divergence to identify potential trend reversals and hidden divergence to confirm the strength of an existing trend. By understanding the differences between these two types of divergence, traders can make more informed decisions in the cryptocurrency market.
Related Tags
Hot Questions
- 84
What are the tax implications of using cryptocurrency?
- 77
What are the best digital currencies to invest in right now?
- 74
How can I protect my digital assets from hackers?
- 58
How can I minimize my tax liability when dealing with cryptocurrencies?
- 40
How does cryptocurrency affect my tax return?
- 26
How can I buy Bitcoin with a credit card?
- 13
What is the future of blockchain technology?
- 9
What are the advantages of using cryptocurrency for online transactions?