All language subtitles for 5. Regular divergences and how to use them--- [ FreeCourseWeb.com ] ---

Hello, guys, and welcome.

In this video, we are going to talk about a regular RSI divergences.

And here are the three main takeaways that you are going to get from this video.

But before we go into some examples of what I mean by these three to three key takeaways.

Let me first show you what is a divergence or so that your divergence for the one of you who are not

who are not really aware while divergence is.

So basically, there is a bullish divergence, which is this one, and a bearish divergence, which

is this one.

You are going to have bearish divergence when a price is making a low and then it makes a lower low.

While RSA is making a low and then it's making a higher law, this is a bullish divergence, you see.

So prices making a low and then are lower, low in the same time.

RSI is making a low and then a higher law.

This is a bullish divergence.

Bearish divergence on the opposite side is it's basically exactly the opposite.

So the price is going to make a high and then a higher high while RSI is making a high and then a lower

high.

This is a bearish divergence.

So I hope it's clear for the one of you who are not really aware what a divergence is and here, one

more thing, I can put actually one more take away momentum before price.

This is key, guys, momentum before price.

You have to remember these and always have it in the back of your head.

You see a momentum before price.

What happens?

Or basically the RSI, the momentum indicator showed before the price.

What is going to talk?

You're right.

You see after this.

I mean, the price was in a downtrend after this.

It had a nice run up, a very nice uptrend.

And then the opposite.

Basically, after today, the vergence, you see the down to it.

But I show you a good examples of the emergences I will show you later on.

What I mean by that divergence doesn't mean change in trend, because it really doesn't mean that.

And now and we will dive into that in a little bit.

But let me first show you these three.

Key takeaways that you are going to have from this video.

The first one, just like I said, divergence doesn't mean change in 10 because there are so many people

who are trading that way.

They think that when they see a divergence, it is going to mean change in trend, just like in this

case.

Yes, it happened here.

Yes, it happened here.

But that doesn't mean that it's always going to happen.

And they divergence really doesn't mean change in trend.

It means they did go.

There should be some pull back.

Right.

But I will show you, just like here, what happened.

You got the divergence, small pullback.

And look what happened.

So divergence doesn't mean change in trend divergence.

The second key takeaway is divergence alone.

It's never a reason for a trade.

You have to have a confluence of reasons.

And now I will dive into that as well.

What I mean by that.

And the third one is that you can use their averages to exit or to take profits.

For example, if for some reason you were short here when you noticed the divergence, you can use it

as take profits and to exit your trades.

Right.

And then if you see.

And you can re-enter.

But this is how you can use the averages as a as a loan.

I mean, as an only reason to exit the trade, basically to take profits, but not to enter a trade

only for that reason.

Just like the same here.

If you were in a long for some reason, it doesn't really matter what your system told you to be along

here and you are along when you're supposed to divergence.

You can take profits and exit the trade.

OK, so let's now dive into some examples here.

I draw a support and resistance, so this is one way to use to trade divergences.

But you see, the divergence is not reason alone, right?

It can't be a main reason.

It can be the main reason.

But you have to have a confluence of reasons.

For example, here it's the same.

It's basically this one is the same example that I show you here.

But now we have a confluence of reasons.

What is the competence for the bullish one we have for support here?

So basically, when you see a divergence sitting on support, bullish there, Vergence sitting on support.

This is when we are in business.

This is when you are in the game and you can take and trade this divergence.

The same here happen.

Berridge, they were just at resistance.

Now, you have a confluence of reason, reasons, and again, the divergence can be the main reason,

but not the only reason to take a trade.

So this is this why I gave this example here.

The same one is here, the same divergences as you can see, they are.

They worked out perfectly because there were a confluence of reasons right here.

This is support.

So basically, you are taking bullish divergence at the support and bearish divergence at Arrow System.

How did I draw my support and resistance?

I have another course for drawing, a very good one for drawing support and resistance.

And I just as always, I am not going to go into that right now because this course is not about that.

But basically it's an inside kendo technique.

You see, this is inside Kando with a lot of volume and see the volume here.

So basically you can get these zone where the price stopped.

You can get these on and just drag it into the infinity and you'll see that he's going to play out.

It played out here and then it played out here again.

The same is with the support.

I can show you real quick, but again, I have another course on that.

We are not going to dive deep in to that.

Right now, you see, after a run up on each side, Kando with a huge volume, you can take the whole

kando.

And basically, when we try again, it here is already a support.

You see it got tested, held.

Test it again and price took off.

Test it again here.

Took off.

So now you see, this is a this is a support, but this is on another course.

If you are interested in how to draw support and resistance is the point here is that now you have confluence

of reasons price is sitting and support and you have the vergence.

Now we are in business here.

Price is right and the resistance you see are right at the resistance and you have divergence, better

divergence.

Now you can take you can take these straight again here.

I want I will show you another example and I will show you how you can basically let me just remove

these lines, how you can enter when you spot a divergence.

So basically, again, here, it's the same way I draw support and resistance, but annual, we are

not going to go into that.

So this is the resistance, right?

Now, this is a two hour chart.

You see here you have Burish divergence at resistance, Besch divergence ET resistance, which is what

we are looking for.

Okay, so now you can.

Played it in aggressive way and entero on on a on a kando before the divergence is confirmed.

Right.

You can play that, but I suggest you two played in another way because you see.

So prices here are assize here now, prices higher here, another size lower.

So it's obvious that there is a divergence, right.

It's obvious because prices is higher already.

But RSI is not.

So you can enter.

You can start already scaling in opposition.

If you want, but I will show you another another way.

So basically, let me see where are my toes?

So you will see the the law of the NSA, right.

So it made the the high.

Then it made a law.

Then it started to run for another for another high.

Right.

So you will take this law here.

You will put the horizontal line.

And when the other side breaks below, this is already changing market structure, right?

But there will be another video in details about market structure on the RSI, because this is crucial.

Even on the price.

This is one.

Probably the most the most important aspect on the price in general.

And on the other side is it's working the same way.

So basically, just like I told your momentum before, price now.

Right.

You see you see our horizontal here.

Where did the RSI broke below?

Not here, but here on this kando.

Right.

So basically on this candle.

So now we have a change in market structure.

Basically a bearish market that are so far off the mark.

So she was bullish.

Now we have low, low or high.

And then now you have a confirmed lower low, which is a change in market structure.

Right.

At this scandal.

And just like I told you, momentum before price.

You see, the RSI showed that we have change in market structure before the price showed it because

the price had to break, although it basically ate this candle.

The price showed a change in market structure.

Right.

But not the artist.

I showed it earlier.

Right.

So basically what you can do if you want to trade divergence, that way you can enter.

On the candle when the other side broke below the slope, basically at this candle.

So if you walk or if you weren't writing this divergence, you are going to to enter here, set your

Stop-Loss above the sweet high and write this bad boy.

And let's see what happened.

This is ideal example, because now you are in short.

And now you are getting bullish divergence.

So what we were talking about earlier, when you are in a trade and you see the averages, you can use

it as an exit, as a Soliris, and you don't even have to have a support and resistance when you see

that the averages, you can exist to protect yourself, to protect your profits because you are on nice

profits.

Right, to protect our profits.

And then if you see some other reason to re-enter, you can re-enter even if it's at the worst price.

Then your exit.

It's the walk.

The main the main idea is that you are protecting yourself.

But we are going to to look at this example as if we are not on our trade, but we want to take a trade

from this divergence.

Right.

So here we are sitting at support.

Remember, just like I told you.

Bullish divergence at support and bearish divergence and resistance.

This is what you are looking for.

If you want to trade on the divergence slope solely.

I mean.

Yeah, basically, if you want to take trades based on a divergence.

So now you have a low, lower, low on price and low and then higher, low on that side.

So what are we doing here?

You are doing the same, just like I show you above.

So you want the price, the RSI basically to break about this level.

And now this will be changing market structure on the RSI because you see, you have a low.

You have a high.

Now you have a higher low.

And now at this point.

All right.

At this candle, you have a higher high, which is change in market structure, bullish market structure,

you see.

This is all right at this kind of you are getting the change of Dow microstructure so you can enter

on this candle, set your stop loss below the swing low and right this bad boy until you decided for

some reason to exit.

This is the way that you can take trait's with divergences, with a confluence of reasons.

Now, I showed you always support and assistance.

You can use it if you want with dynamic support and resistance, which is moving averages, you can

use it to its sound pattern, whatever you like.

But there should be more reasons, not the divergence as a reason alone, because look what will happen

here.

I prepare you another example where it did not work out and let's see what happened here.

And this will happen many times, guys, because divergences, they occured in a strong Trents and they

are a signal for a strong trend that they are not single, that the trend will change.

Yes, sometimes the trend will change.

But in general, they are single that there is a strong trend.

And it's I mean, you don't really wants to do anything against the strong trend.

And if you enter, you'll have to be aware that you are counter trading.

Another thing that I wanted to do to point is that basically if you are entering a window on a divergence

alone, you have to be aware that you are called outrating because you see here the trend is up and

then you are entering based on a divergence.

You have to be aware that you are called trading.

And just like, you know, this is I not recommend Khater trading for new traders.

You can make a lot of money that way, but you have to be specializing in that and to be to be professional,

right?

Counter-attack better stick with the trend.

But anyway, let's see what happens here.

Let's see why it did not worked out here.

So what do we have here?

We have higher high end price.

And we have low high on that aside.

Right.

So this is clear, Solti's is a bearish divergence.

Now, if you are trading the bearish divergence in the way that I showed you, now we are not going

to look if this is resistance or what, let's imagine that it's that resistance and that you wanted

to take this trade.

And this divergence.

You wants to to go short here.

Basically, when you notice that they were just let's say that you have another reason.

So you have confluence of reasons and you are looking for on entry now.

You remember what we are looking for.

We are looking for this low to be taken out.

As to whether on the kando, right, on the Kando clause.

But what you will note is that it did not really happen here, did it, guys?

No, it did not happen here.

What happened instead is you got another one here which basically created another divergence.

Do you follow on this one guy?

So basically, you are not going to get a tree here at all because the RSA did not break below.

Right.

Remember, we are waiting for the RSI to break below and to enter on the candle close, but it did not

happen.

You will notice that it happened here.

But before that, we got another round and another divergence.

So now we have a divergence from year to year and from here to here.

And now you are.

Okay, I we went there on that one.

You are setting here your horizontal to wait for entry and you will see that.

All right.

At this scandal, you got an entry, right.

So basically, look at this scandal.

You are going to enter a short trade with that stop loss above the swing high.

Right.

So let's see now what happened.

Why, it did not basically it worked out because, you see, it gave you a nice room of you are going

to enter here at the maximum it was four and a half, four point six percent.

So basically, you are not going to take a loss here for sure.

I mean, when you have a run like that, more than two or three percent, whatever you like, you can

set or you can move your stop loss to break even.

Right.

So you can you move your stop loss to break even.

So you are not going to lose anything on the straight.

But this is not a what's the point now that I wants to make.

The point is why it did not work out.

This divergence.

It worked out socially, but why so shortly lived?

And then look what happened after that, a massive front.

Now, I ask you if you are noticing something here on the RSI, on the price, and I guess most of you

will not be noticing what's going on here, because this topic is a little bit like a kept in secret

in the the in the trading communities.

I don't know how, but it's like a top secret.

Almost nobody is talking about it.

Everyone is talking about the you are the original, but nobody is talking about this and all of these

guys.

It is a hidden divergence, hidden divergence.

And now there will be another video that we will go through that in details indicate that they were

just because it's my favorite divergence.

And you can take out trades based on the averages alone and not like the data you're with the regular

are.

You have to have another reason.

With the heat hidden, you can take a trade alone based on this on this reason.

What is a divergence?

You see how the RSI made the lower low here.

What the what happened with the prize, the prize, usually we'll make a higher law now in this case.

It's a little bit like a double bottom, right?

It's a little bit like a double bottom, but it still Waheeda divergence.

And the heat and the divergences do we'll find them after our regular divergence.

And what happens is that they cancel the regular divergence.

So when you see a hidden divergence, this is a hidden ambush divergence.

When you see a hidden bullish divergence, that is after all right, you are better divergence.

The better divergence is canceled.

And you can expect that the press will continue to run.

Because the heated divergences they are showing, trend, continuation, continuation, trend, continuation

and deaths.

I love them basic.

I love to hear divergences.

And on the next video, we are going to talk more about them.

So this is it for this video.

See you in the next one.