DIVERGENCE! 🤬 (Please help)

Can someone pleeeeeeaaaaaase clear this up for me?

When I Google “divergence” and look up images to keep in another tab, I’m met with this:

vs

Google either doesn’t know the write answer or can’t parse these well enough to discern their accuracy.

Please someone, which of these is correct?

:pray::pray::pray:

So, maybe I’m tripping, but the second diagram is the wrong way round. I cannot find any other diagram that correlates with that one. It also makes no logical sense. So either they commissioned someone to make the diagram, who reversed the whole process, or it’s manipulation by smart money and the market makers. :joy::moneybag: (Good band name that)
I’m no expert, but if the second one is right I’ve been de-diverging the whole time. It would explain my trading results, to be fair. :thinking:

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Oscillators are a derivative of historical prices.

Historical prices cannot predict future price movements.

Derivatives of historical prices can trend up before they go down, or trend up before they go up, or go sideways before they go up. There are no advantages by calculating derivatives of historical prices. Both can be true, unable to know when.

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The second diagram that you posted has Bearish and Bullish mislabeled.

This is a correct diagram:

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That makes much more sense.

Certainly something was very wrong with the original version! :open_mouth:

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What if we cld use historical prices on a correlated price instrument - classically risk.

Perhaps XAU/USD & USD/JPY come Monday & Stocks signalling a buy on the latter?

Long time since i looked at Will-Spread so will be interesting since most guys are negative stocks right now…

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Not bad day for buying stocks & risk despite all the negativity.

Edit signalling a sell today on US so again will be interesting.

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well what I can see the second picture is impossible! this cannot happen in any of the oscillators I know! The first picture shows what I my self identify as divergence both with RSI and volume and a number of less popular oscillators.

I’ve certainly seen it - even with widely used oscillators such as the ones you mentioned (as well as CCI), there can be both trend-continuation divergences and trend-reversal divergences.

In a strong trend, traders should also be trying to identify and recognise trend-continuation entry-signals, in general. More specifically, people trying to predict trend reversals from divergence between oscillators and prices are well advised to be aware that in a strong trend, these can very easily produce multiple consecutive losses. These can still be avoided simply by combining your divergence interpretation with the ADX indicator, to indicate trend-strength (not a typical use of ADX, certainly, and not one I’ve tried, myself, but its adherents certainly claim to benefit from it).

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I identify that as “regular divergence”.

The second one I identify as “hidden divergence”. I think these terms are used the same way everywhere where trading charts and indicators are discussed? As far as I know, anyway - certainly in the books and websites I’ve seen.

I know some people are quite surprised by hidden divergence, but as the saying goes, “it’s there is you look for it!” :wink:

(I don’t mean the mislabelled one originally asked about, of course: I mean the corrected version posted by @MartialChartsFX .)

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Can you show me somewhere where the price is forming higher highs and the indicator is showing lower lows?!

I’m pretty sure I have it now thanks to @martialchartsfx and others, but I’d love to hear your two cents.

The bottom one has macd applied iit is faster
But to work needs momentum