This post summarise what I learn from LP, owner of Bullythebear blog. I will follow on with 5 charts after this post for applying and checking what I had understand so far is correct or not.
Bullish divergence means that the price has a high chance of going up.
The divergence refer to the fact that price and whatever indicator you are seeing, are moving in opposite direction.
Example, if use vol, then a bullish (vol) divergence means that the price showing a lower low, but vol shows a higher low.
If you see a bullish Divergence on weekly and a bullish Divergence on daily, what will you do?
long
If you see a bearish Divergence on weekly and bearish D on daily, what will you do?
short
If you see bullish Divergence weekly bearish Divergence daily?
There's no correct ans. First of all, the general guide is to ......