The video discusses a simple trading strategy using divergences, which are when price action moves in the opposite direction of an indicator. The video explains bullish and bearish divergences, and how they can be used to find profitable trades. Higher timeframes will result in bigger moves, but take longer to play out, while lower timeframes will have smaller moves but will play out more quickly. Examples of bearish divergences on the weekly and 12-hour chart are shown, demonstrating how identifying divergences can lead to significant gains. The video also promotes the BitLab Academy and the Frankie Candles YouTube channel as resources for learning about trading.
Discovering Profitable Trades with Divergences
What is going on, BitSquad? Frankie Candles here, and in this video, I’ll share a simple trading strategy that can help you find profitable trades.
To learn how to trade crypto, you’ll need some knowledge on how to read a chart. If starting from absolute zero, head to BitLab Academy. For more free resources, check out my YouTube channel, Frankie Candles. Join my Discord channel for a community of active traders sharing their ideas.
What are Divergences?
Divergences occur when price moves in the opposite direction of an indicator. The momentum indicator is commonly used, such as RSI or MACD.
Types of Divergences
Bearish and bullish are the two main types of divergences. Regular and hidden are other types. In this video, we’ll focus on regular divergences.
Bearish Divergence Example
For a bearish divergence, we look for price making higher highs with the momentum oscillator making lower highs. This suggests that the move is not sustainable and is likely to reverse in the opposite direction.
Bullish Divergence Example
For a bullish divergence, we look for price making lower lows with the momentum oscillator making higher lows.
Application of the Strategy
To find profitable trades with divergences, we need to look at the charts. Higher timeframes give us bigger moves while lower timeframes give us smaller moves. Bearish divergences can call for the beginning of a bear market.
Divergences are a simple yet effective trading strategy to find profitable trades in the crypto market. Follow the links in the description to learn more and join the community. Happy Trading!