BTC volume divergence RE-ANALYSIS! IMPORTANT TO KNOW!
While we are waiting for the swing high to take place (we shouldn't be in a reversal JUST YET!), I believe we should get a candle to CLOSE inside that 15700-15800 price region I talked about in my previous idea.
The last time I did a volume divergence analysis for you guys, I had actually gotten it WRONG.
In a reversal period (which SOW - sign of weakness - is categorized as the bearish leg of an uptrend), we SHOULD see swing high buying volume candles FLIP divergence with swing low selling volume candles to where the volume candles that make up the swing lows are no longer in hidden divergence, but the trend line between the previous swing low volume candle should be in-line with the next swing low... And swing high volume candles will be in hidden divergence to the last swing high volume candle, meaning the swing high / swing low volume candles will have flipped divergences and it should signal the downtrend.
That SHOULD prove that we are in a downtrend officially... (RSI divergence of previous swing high to this swing high will CONFIRM this theory)
Our next reversal (after SOW) will have the same characteristics, but we will be back into the same type of divergences we are currently experiencing (swing high volume candles in regular divergence and swing low volume candles in hidden divergence).
I hope that I cleared up a little bit of confusion on the volume divergence for you guys and how to detect trend reversals with it... Once you grasp the theory, it will be an INVALUABLE tool for your trades.
This is exactly how I was able to determine yesterday that price was going to make it up to the price range I called for to play out.
The last time I did a volume divergence analysis for you guys, I had actually gotten it WRONG.
In a reversal period (which SOW - sign of weakness - is categorized as the bearish leg of an uptrend), we SHOULD see swing high buying volume candles FLIP divergence with swing low selling volume candles to where the volume candles that make up the swing lows are no longer in hidden divergence, but the trend line between the previous swing low volume candle should be in-line with the next swing low... And swing high volume candles will be in hidden divergence to the last swing high volume candle, meaning the swing high / swing low volume candles will have flipped divergences and it should signal the downtrend.
That SHOULD prove that we are in a downtrend officially... (RSI divergence of previous swing high to this swing high will CONFIRM this theory)
Our next reversal (after SOW) will have the same characteristics, but we will be back into the same type of divergences we are currently experiencing (swing high volume candles in regular divergence and swing low volume candles in hidden divergence).
I hope that I cleared up a little bit of confusion on the volume divergence for you guys and how to detect trend reversals with it... Once you grasp the theory, it will be an INVALUABLE tool for your trades.
This is exactly how I was able to determine yesterday that price was going to make it up to the price range I called for to play out.
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