 What is going on ladies and gentlemen and welcome to another video of Bitcoin daily today? We are talking about trading divergence because we've been seeing it in Bitcoin as of recent and It's signaled a few different key pullbacks And we've pointed out these pullbacks if you've been checking out our market analysis We've been calling out these and pointing out these Divergences so Let's let's go ahead and before we jump in as always guys if you can please make sure to hit that subscription Subscribe make sure to hit that like and make sure to hit that notification bell Because it helps our channel continue to grow And continue to expand our community and our reach as we continue to put out more content every single day five days a week So make sure to do that. So let's jump right into it guys Talk about we're gonna be talking about trade trading divergence today Because trends are composed of a series of price swings momentum in trading plays a key role in Assessing the trend strength right so as such it is important to know when a trend is slowing down Less momentum does not always lead to a reversal, but it does signal something is changing and the trend may consolidate or reverse Price swings are not always easy to evaluate with the naked eye because a price can be choppy But momentum indicators are commonly used to smooth out that price action and give a clearer picture They follow they allow the trader to compare the indicators Swings to price swings rather than having them compare price to price So that's basically an introduction into why we use You know indicators to find those that divergence All right, so the first thing we're gonna talk about let me move my face out the way and Let's go to slide show from current slide So first we're gonna talk about is momentum indicators, right? So the common in momentum indicators for measuring price movements include the relative strength Index, which is the RSI the stochastics and a rate of change RLC So those are some of the more popular popular indicators, right? So before we jump into this next one, I want to Show you guys the chart here on Bitcoin So you can see what exactly what is I'm talking about So here you see that the price Is goes from a lower high To a higher high, right? So it happened here. It happened. This is a lower high. This is a higher high This is now becomes a lower high and then another higher high, right? So here we saw a higher high to a lower high and Another higher high to a lower high, right? So this is the the strength index the RSI here the momentum, right is not Agreeing it does not agree with what the price action is doing So when there's a disagreement between price action and momentum Something is going on there right like something is off these have to always move in sync and that shows you that That you're still good that momentum is still up see how this this one up like this boom That's this right here. That's this candle right here. See how it went down That's when we pulled back right there and see how it continued up. That's all this part right there So the momentum at this point was agreeing with the what the what the price was doing with the price action Now when we come over here Now it's not agreeing anymore because this is going up price actions going up momentum is going down So there's something off there, right? If we come over here Look at this right a lower high to a higher high This is a higher high to a lower high. So I pointed this this out to you guys and that What that signaled was a pullback and here's a pullback we consolidated here Before taking back off and then right around here you see that That the price Action and the momentum started agreeing with each other again. They started moving the same exact way again You could even see it here So once that happened that was a signal That now the price is backward should be and it could continue where it was going it could continue in its trend So here you see the price action and momentum both continued together up to here and This is where momentum and price action began disagreeing Again, which signaled another drop-off, right? so Now that you guys have a basic understanding. Let's get more into the theory of it So you guys can really get the understanding So for each upswing and price there is a similar upswing and RSI when price swings down RSI also swings down. So you see here The price goes up RSI goes up price goes down RSI goes down up down up down You get the you get the point Then you see here and on a B that You could draw a line and it Matches right? It's more or less matching here Because we're getting lower high to higher high lower high to higher high But now look at this the price is still going up And momentum is not going up momentum is now dying down So once you see the disagreement between price action and momentum This usually signals a pullback. So If you would have seen this here, you would have taken profit Or kept your stop losses real tight And on this pullback now you're ready to buy back in so now you're looking to buy back at this support right here Right, so that that's the the range that you're looking to buy back in And now you see here boom Okay, so indicator swings generally follow the indicator of price swings trend lines can be drawn onto highs And lows to compare the momentum between price and the indicator The study of momentum simply checks whether price and the indicator agree or disagree Compare price and indicator to make better trading decisions. So here we go again This is an example of when the price action and the momentum agree You see here price is a lower high to higher high momentum is a lower high to higher high on the mac d indicator Um, and then this is an example when it does not agree So price goes from a lower high to a higher high But the indicator of momentum goes from a higher high to a lower higher, right? So price does not agree here momentum divergence disagreement between the indicator and price is called divergence And it can have significant implications for trade management The amount of agreement disagreement is relative So there can be several different patterns that develop in the relationship between price and the indicator It is important to note There must be price swings of sufficient strength to take momentum analysis to take to make momentum analysis valid Therefore momentum is useful in active trends, but is not useful in range conditions in which price swings are limited and variable So that basically means like, you know when it's just consolidating like this You then it doesn't really matter here. You see how it's kind of High to and it's going down when here is just kind of staying the same When it's consolidating in the range, then uh, it doesn't really factor in um Momentum divergence continued here divergence in an uptrend occurs when price makes a higher high But the indicator does not In a downtrend divergence occurs when price makes a lower low But the indicator does not when divergence is spotted. There is a higher probability Of a price retracement So here you can see we got we have a lower high and a higher high But on the momentum indicator, we have a higher high I'm sorry higher a low We have a lower high and a higher high and here we have a higher high and a lower high so price action and momentum does not match here which caused a Drop back down to support and consolidation Uh divergence helps the trader recognize and react appropriately to a change in price action It tells us something is changing and the trader must make a decision Such as tighten the stop loss or take profit seeing divergence increases profitability by alerting the trader to protect profits Take note of the chart which shares pulled back to support the chart shows Uh trends do not reverse quickly or even often therefore We make the best profits when we understand trend momentum and use it for the right strategy at the right time so um basically when you see a divergence in The price action and momentum you should either be taking profits or Setting up your trail stop, you know tightening up your stop losses Etc. Um, and you should be preparing pullback buys at support levels Um, so here you can see the divergence higher higher high Uh Well here's just kind of I think this is after I think to start showing after What happens because here is kind of the same As you can see here higher high lower highs you can see Once it start once the price is back in agreement So I I believe what we're looking at here is after the divergence the price consolidated And you see that the rsi the momentum and the price are back into agreement And then it takes off and boom takes off you see it there you see here So this is that's why you you're buying here on support So managing divergence divergence is important for trade management In the last chart taking profit taking profit you would want to That doesn't make sense. Sorry about that You would want to take profit once the divergence pops up then look for a pullback entry The divert the divergence between the price and the indicator lead to a pullback then the trend continued Okay, so that's for following the the last the previous chart if you look at the pivot the price makes below the lower trend line This is often referred to as a bear trap Where the false signal draws in shorts and price quickly reverses the signal to enter appeared when the higher low In price agreed with the higher low of the indicator of the indicator Divergence indicates something is changing, but it does not mean that the trend will reverse It signals the trader must consider strategy options either holding tightening the stop or taking partial profits The glamour of wanting to pick the top or bottom is more about ego than profits To be consistently profitable is to pick the right strategy for what price is doing not what we think price will do So that's very important guys. Let me go back So When we saw a higher low What was it a lower a higher low? Here so this is a higher higher high higher low This is our this would be the signal to jump back in And they're both in agreement as you guys can see there And uh a big thing that I want to note here The glamour of wanting to pick the top or bottom is more about ego than profits That it's huge guys that you're never going to be able to pick the perfect bottom of the perfect top You have to trade in between if you try to pick the bottom or top you're going to be a losing trader because that's not where winning traders trade To be consistently profitable is to pick the right strategy for what price is doing not what we think price will do Very big guys This chart shows a divergence that leads to sideways price action Notice the weakening momentum in the mac d indicator as price enters a range This signals the traders should consider strategy options When price and indicator are inconsistent relative to each other, we have a disagreement or divergence We are not in control of what price will do instead. We control only our own actions I'm gonna read that part that part one more time guys. We are not in control of what price will do We cannot control the price But we can control our own actions so, um You see the divergence here Lower high higher high and then the indicator is a higher high lower high, right? um, so that triggered a consolidation period Right there. So that that was the divergence Um, the bottom line is the most useful way to use a momentum indicator is to know what strategy to use Price will lead the way But but momentum can indicate a time to preserve profits The skill of a professional trader lies in his or her ability to implement the correct strategy for price action That is it guys. That is simple enough um As simple as we can make it for you guys It is A very very good thing to add into your trading strategies as we look here At what's going on with bitcoin. You can see it live right now. We've been pointing this out The divergence in the price, right? So you guys see it So just letting you guys know to be careful with this right here What where you're looking to enter right now you're looking to enter once the Momentum indicator and the price action start Um agreeing with each other again, right? So we want to see both of these moving exactly the same So once we see that that's going to signal an entry because it's going to signal, you know, it's ready to To continue its trend so As far as what happened what's happened today Um in the last 24 hours you can see here that the price it dropped And it dropped right on onto this support ascending support that we Previously had on here on our chart Um, and you can see this support actually came from the triangle the Bull flag that we had that we had set up So we had a bull flag if you guys remember the top was right here boom and the bottom was right here We continued that bottom after it broke out of that top part and you can see now it's playing as a support um, so The areas if you're looking to enter The the this is going to be a minor support. There's not any major support Um, but it is holding up thus far Um, but 13 k is the biggest whole number here. So the it's the biggest support It's where there's support down here. So 13 k is ideally where I like to enter And then below 13 k the next area where I like to enter is between 12.7 k and 12.8 k in this green box right here that I've called out a few times and you see every time it's touched it has taken off So those are the two entries I am currently looking for But remember you also want to make sure that the momentum indicator is agreeing with the price action at the time of entry So that's all I got for you guys today. I hope you guys got something out of this I hope this has elevated your trading and I hope this Helps you guys make some profits in the long term Um, that's pretty much it but let's jump into our question of the day Um, so what should be the question of the day for today? Huh, huh? Uh, let's see. Let's see. Let's see. Let's see Uh, where is my thing with the question of the day? All right, so let's just go over the question of the day real quick Remember every video. We'll have a random question about something in the video Find the question then find the answer in the video post your your answer in the comments for a chance to win A three months membership in our trading room To our trading room winners will be picked randomly once the video receives over 30 likes So let's go ahead and check if any of our recent videos have received the 30 likes here Let's go ahead and Reload this page See where we're at. So we're at Right here 19 likes and seven likes So we need 11 more For this video. This is monday's video And we we still need a few more over here. So go ahead and smash that like button guys Um And make sure to so that we can do give do this giveaway So the question of the day today is going to be Um Where's the presentation? Ah, what should we do? All right. I'm gonna just make it real simple guys for the question of the day. Um What is trading divergence? That's that's it. That's as simple as it could get. What is divergence? What is trading divergence? What does it mean? How do you spot it? Where do you spot it? So just give me in your own words What trading divergence is and how how do you spot it on the chart? That's it guys Thank you guys. If you watch this full video, I appreciate you guys as always Please make sure to smash that like button smash that subscription We're trying to get 2 000 subscribers by the end of the year. So help us reach that goal Thank you guys as always peace and love. See you tomorrow