11_Divergent High

Understanding divergence is crucial for identifying trend reversals.

1. Divergence Explained:

• Definition: Divergent high occurs when an asset's price hits a new high without confirmation from indicators like the OTS Green Line. Divergent low occurs when the price hits a new low without indicator support.

• Significance: Indicates weakening momentum and potential trend reversal.

2. The Role of the OTS Green Line:

• Indicator Support: Reliable tool for recognizing divergence.

• Detection: When the Green Line doesn't mirror price movements, it signals potential reversals, prompting action.

3. Strategic Responses:

• Fade the Trend: Capitalize on reversals by taking positions opposite to the trend.

• Exit Positions: Exit positions aligned with the prior trend to lock in profits and minimize risks.

4. Maximizing Profit:

• Profit Optimization: Refine entry and exit points based on divergence signals to maximize profit potential.

5. Integration with Trading Strategy:

• Comprehensive Strategy Enhancement: Enhance decision-making by integrating divergence analysis into broader trading strategies, considering trend strength and momentum.