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Chapter 8. Advanced Moving Average Conve... > Using Divergences to Recognize the M...

Using Divergences to Recognize the Most Reliable Signals

Negative divergences are said to take place when price levels of the investment in question reach new highs, but measures that reflect upside market momentum fail to reach new positive areas.

Positive divergences are said to take place when price levels of the investment in question fall to new lows for the cycle, but measures that reflect downside market momentum fail to decline to more negative areas.


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