Crypto Buying Strategy Based on Divergence Opportunities – Spot72.com
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Buy Crypto Strategies Based on Divergence Opportunities – Investing and trading crypto currency actually has the opportunity to get too big profits. However, it must be realized that behind this sweet opportunity there is a high risk of loss.
Especially in the world of crypto which is too volatile, you are required to minimize risk by understanding when is the best time to buy crypto and resell it.
Actually, there are many steps and tricks you can learn to minimize the risk of buying crypto so you don’t lose money, namely with the Divergence opportunity. The Divergence strategy is recognized as one of the most complete tricks that can predict future crypto prices.
Because it can show price indications, it’s no wonder, for example, that investors and traders often use it to identify when a trend is continuing or reversing. Thus, this trick is suitable as your advice to buy crypto. How to? Read more in this article.
What is Divergence?
In the world of trading and investment, Divergence is a situation where the price of an asset moves in the opposite direction to an oscillator indicator, such as the RSI or MACD.
Divergence is recognized as a warning signal of weakening prices and a possible change in trend direction. You can take advantage of this signal to buy crypto at the right time.
There are two types of Divergence characteristics, namely Bullish Divergence and Bearish Divergence. Of the two types of Divergence characteristics, there are three types of forms that provide more complete opportunity information, namely Regular Divergence, Hidden Divergence, and Exaggerated Divergence. For more details, it can be seen in the example illustration below.
After you understand the example of the illustration, then how do you apply the trick? The following is a complete explanation along with examples of its application to buy crypto.
Consisting of Regular Bullish Divergence and Regular Bearish Divergence, this type is a Divergence reversal marker. Regular Bullish Divergence occurs for example when the price is in a lower low, but the oscillator indicator shows a higher low. The following conditions indicate the downtrend is weakening and get ready to buy crypto when a bullish reversal occurs.
Meanwhile, Regular Bearish Divergence occurs when the price is in a higher high, but the oscillator indicator shows a lower high. So the indication shown is a bearish reversal. Below is an example chart of both.
Unlike the Regular Divergence which is a reversal signal. Hidden Divergent is a signal for continuation or trend forwarding. Hidden Bullish Divergence occurs for example when the price is in a higher low, but the oscillator indicator shows a lower low. The following conditions are generally used to buy crypto when the price is in the middle of a retracement.
Conversely, Hidden Bearish Divergence occurs when the price is in a lower high, but the oscillator indicator shows a higher high. Then the indication shown is a bearish continuation. Below is an example chart of both.
Exaggerated Divergence is the most unique and easy to understand signal. In this type of Divergence, you can get forward and reverse signals, depending on the price or indicators that form a double bottom-top and lower high-higher low. Below are 2 examples of Exaggerated Bullish Divergence and Exaggerated Bearish Divergence.
The Easiest Way to Distinguish Bullish and Bearish Divergence
Maybe some of you are still confused by the many types of Bullish and Bearish Divergence, so you have to match the example in the illustration above. Well, actually there is the easiest step so that you can immediately remember by rote the difference between Bullish and Bearish Divergence signals.
To easily distinguish Bullish and Bearish Divergence signals, you only need to look at where the two lines are located, without having to remember what shape they are.
If a Divergence is formed with both lines being below or being support for the price and the indicator, then that is a Bullish Divergence signal. Conversely, if a Divergence is formed with the two lines being above or becoming resistance for the price and the indicator, then it is a Bearish Divergence signal. It’s easy, right?
How to Take Advantage of Divergence Opportunities to Buy Crypto
Who says buying crypto can only take advantage of bullish signals? Even on a bearish signal you can also buy crypto, but of course by using other cryptocurrencies through trusted crypto exchanges.
More specifically, you can try how to buy crypto taking advantage of the Divergence opportunity, like the example below.
Watch full video click here.