Home › Market News › [VIDEO] How To Understand Divergence In Day Trading – Coach’s Playbook
Divergence happens when the price of the market you’re watching and an indicator, like a moving average or a momentum oscillator, begin moving away from each other or in opposite directions. Here’s what our coaches have to say about it.
So, in a nutshell, when a divergence occurs, then we’re typically going to be looking for the strength a market is moving in a particular direction to start to weaken or change direction possibly.
Big shout out to Marlin H., who’s been crushing it in the Nasdaq and is up another $1,900 again today. Keep it up!
Momentum is something you can gauge on any timefrime and adjust your strategy around it. There are a lot of good indicators out there to help you get a feel for where the market could be heading, but they should all be used in combination with other indicators. As Hoag says in the video, overbought conditions do NOT mean you’re close to a high, and oversold conditions by no means imply the market is close to a low.
The market is going to do what the market is going to do, so continue to test out different strategies, but don’t get frustrated when you’re not seeing the results you want to see. Trading is a learning process and every day you stay in the game is another opportunity to learn something new.
Always trade for tomorrow!
