Prices and indicators are incompatible. It is when the bottoms and tops of the prices are not compatible with the bottoms and tops of the indicators. In other words, the price decreases when the indicator bottoms rise, or the price rises when the indicator tops fall. #crypto #btc
Positive divergence (Pu): While the indicator bottoms are rising, the price is falling.
Negative divergence (Nu): While the indicator tops are falling, the price is rising
Hidden Pu: As the indicator bottoms fall, the price rises
Secret Nu: While the indicator tops are rising, the price is falling
Positive divergence works better at indicator bottoms, while negative discordance works better at indicator tops. Hidden incompatibilities generally work better in the middle of the indicator. Compatibility study can be done with various indicators: macd, rsi, bb etc.
The most important situation in case of incompatibilities is the movement of the price and the bottom and top of the indicator. It is also important to evaluate the indicators according to price movements that comply with their logic.
For example,#RSIis an indicator that takes price closings into account. When looking for RSI discord, the disparity should be checked according to the closing values of the price. Of course, incompatibility is not the sole reason for entering into a transaction; it must be evaluated together with other factors for confirmation purposes. 👊🧢
How are incompatibilities evaluated? It can be seen in the image at the beginning of the article, but let's add it anyway. As a result of positive mismatches, the price is expected to rise, and as a result of negative mismatches, the price is expected to fall. 👋🧢
