In the digital currency markets, there are many tools that have come to the aid of analysts and are constantly used to evaluate the state of the market shares. Also, by using technical analysis, which has a very valuable tool for analyzing the position of all types of stocks, it can play a significant role in improving the trading process and determining important points for buying or selling stocks, of course, you must have sufficient knowledge of this tool. One of the important concepts in the technical analysis of time divergence is that trading with time divergence provides effective data to market analysts, and also there are many people who have used this technique and it has made them earn, for this reason, continue to teach time divergence we pay
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What is Time Divergence?
To answer the question, what is time divergence? As we said in technical analysis, time divergence is one of the widely used and basic concepts in digital currency markets. In principle, time divergence can be a sign of fluctuations resulting from market emotions and feelings, and it is also better to know that time divergence has an acceptable validity among the available tools in market analysis. Therefore, divergence occurs in the market when the indicator and the price chart are moving in opposite directions, and if possible, a change in the share may also occur. Also, another factor causes time divergence and it is when the time parameter is in the opposite direction, i.e. against the price, it causes it to occur.
Stock market traders, in order to win in their transactions, buy the stocks they want based on the trend of the shares and also by increasing the power of the buyers at the same time. Therefore, traders have turned to time divergence in order to obtain important information about price fluctuations.
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Normal time divergence
Time divergence occurs mostly when it is in correction method. Therefore, the usual time divergence is that if the correction candles are more than the sum of the previous candles, it will be created. With the formation of this method, it is predicted that the stock will continue its previous movement and there is no great desire to turn the market trend, and it also plays the role of a continuing pattern. Of course, note that in normal time divergence, it is very important to identify the ideal pattern to find the entry point of the stock.
Smart time divergence
In smart divergence, which stands for STD and occurs when the number of correction candles is less than the previous candles; Of course, time correction should happen more than price correction. Therefore, in the correction process, the market power will be less than the power of the traders in the market, which is expected to work as a continuation method, and also to watch the smart time divergence, the Fibonacci time retracement should be formed.
Fibonacci time recursion pattern
Fibonacci is one of the very important tools that is used to analyze stocks, the Fibonacci ratios of time return are 38.2%, 50%, 61.8%, 100% and 161.8%, among which there are two ratios of 100 % and 161.8% have a great value compared to the rest of them. To activate it, we first draw a Fibonacci pattern on the page, and then click on the red part twice to activate it, and in the settings, in the ADD section, you must activate the Level and description option. By doing this, Fibonacci is compared to Complete the settings.
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Method of trading with time divergence
In order to make better profits in the investment market, traders refer to the tools available in technical analysis, and it also helps you make better decisions about buying and selling your stocks. From this time divergence, it gives you the possibility that the time determines the point of entering the stock or the point of exiting the stock for you, and a correct understanding of these points can bring you successful transactions. To understand it, it is better to know that when the time divergence gives you an indication of the increase in the power of buyers, it means that the tendency to buy has increased. From now on, when it gives information about the increase in the power of sellers in the market, there is a tendency to sell stocks, and in order to be able to identify powerful traders in time frames, you should use Fibonacci.
Positive normal divergence strategy
One of the actions that a trader should take advantage of in the digital currency market is to have a trading strategy that, with a valid strategy, you will be able to buy and sell your shares with a specific goal. If you proceed to trade without having a strategy, you may face problems and confusion in your trades. To understand positive normal divergence, whenever the price chart is moving upwards, it means that the slope chart of the indicator is positive. With this situation, the stock chart may enter an upward trend in its next movement after passing through the corrective trend.
Basically, when the positive divergence chart shows a positive reaction to the support of the share, it is considered the best situation to buy shares, and the best trading strategy in this type of divergence is to determine the entry point at the end of the correction process or the exit at the moment of the completion of the upward trend, which is at the end of the trend. A correction is issued to buy a positive signal so that the trader can benefit from the appropriate profit that is in the upward movement of the stock.
Stock exit strategy using divergence
After the upward trend is formed in the divergence, you should determine a suitable point to determine the profit limit and exit the transaction, and keep in mind that the exit strategy is as important as the purchase strategy. As you know, every share will reach a specific goal after price fluctuations in a period of time, which may be upward or downward. Therefore, by specifying the profit limit point in the upward trend of the stock, you will be able to exit your share at the best time and earn a profit.
In this article, we have taught time divergence and also presented the method of trading with it for you, dear users, by using which you can bring better performance and even more profit in your transactions. It helps you to enter the trade at the best profitable time or to exit the trade so that you don’t face possible losses.