Divergences



In this page, you will learn the meaning of all the settings in the ‘Divergences’ section in the settings.




Before we talk about the settings, first we need to define some terms.


What is RSI?
The RSI is an indicator that stands for ‘Relative Strength Index’.

What are Divergences?
A divergence occurs when price moves in the opposite direction of the oscillator (RSI, in this case). In other words, a chart might display a change in momentum before a corresponding change in price.
When you subscribe to the StratBuilder, you also get the ‘Algo Divergences’ indicator, which can visually display all 4 types of divergences. The StratBuilder is using the same divergences that are displayed in the ‘Algo Divergences’ indicator.

The 4 types of divergences are:
  • Regular Bullish Divergence - Lower low on price action and higher low on oscillator
  • Regular Bearish Divergence - Higher high on price action and lower high on oscillator
  • Hidden Bullish Divergence - Higher low on price action and lower low on oscillator
  • Hidden Bearish Divergence - Lower high on price action and higher high on oscillator



The Settings

Entries

The settings in this section are pretty self-explanatory once you understand the terms. When you check a box for entry on any particular divergence, the divergence must be present since the amount of bars from ‘Bars XYZ Div is Valid’ to the bar of entry.



Exits

When you check a box for exit on any particular divergence, it will exit the trade once that divergence has been confirmed.