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.
