Price/Oscillator Divergences by W. Lawson McWhorter
ARTICLE SYNOPSIS ...Price/Oscillator Divergences By W. Lawson McWhorter
Have Dow theory divergences always fascinated you? Well, you're in luck. Here's a primer on observing divergence between indicators and prices to generate trading signals.
Divergence, or the nonconfirmation of price movement by a related market, security or technical
indicator, has long been a useful part of the technician's repertoire. The importance of divergence was
first recognized by Charles Dow and his successor, William Hamilton, in what has become known as the
Dow theory. One of the central premises of this method is that any move i...