The idea here is to use the to gauge the divergence of a downtrend in price with an uptrend in .
- The pink lines (March 8th to 17th) use the exact same dates noting the divergence in to price.
- Next I draw a purple line as an extention of where a potential buy oppotunity would exist
- Buy when a strong green candle breaks out of this purple line or a strong green candle closes on top of the line
- If this does not happen then do not buy
- Looking to seee where this next green candle closes, if it closes strong above the purple line, BUY.
***False divergence just days before, March 8th to 14th when there was no strength to break the pink resistance line
BTCUSD 4h Chart, 11
Same concept as above, note red and yellow lines here
- Red line shows divergence in downward pressure of price with upward movement of
- Was looking for a price break above the red line to confirm the breakout but this never happened.
- continued the yellow line to the next instance of divergence.
- Just got the large green candle breakout, will look for upside from here