Learn how to spot regular and hidden divergences to increase your trading success. Use the RSI momentum indicator with adjusted settings to trade with the trend. Set a risk to reward ratio of 1:2 and close 90% of your trade at your profit take level.

How to Spot Divergences for Successful Day Trading

Introduction
– Day traders often experience losses when starting out
– Spotting divergences can increase your probability of success
– This video will show you how to enter trades based on divergences

Setting Up Your Charts
– Use TradingView and select your preferred cryptocurrency or forex pair
– Use the RSI indicator with custom settings (length 14, yellow color, upper/lower bands set at 50)

Regular Bullish Divergence
– Look for a period of lower lows in price action
– Check the RSI levels for a higher low
– Wait for a solid rejection candle in the same direction
– Enter long position with stop loss below the previous low and target a 1:2 risk to reward ratio
– Exit 90% of the trade at the target and move stop loss for the remaining 10% to a profit

Regular Bearish Divergence
– Look for a period of higher highs in price action
– Check the RSI levels for a lower high
– Wait for a solid rejection candle in the opposite direction
– Enter short position with stop loss above the previous high and target a 1:2 risk to reward ratio
– Exit 90% of the trade at the target and let the rest ride

Hidden Bullish Divergence
– Look for a trend of higher lows in price action
– Check the RSI levels for a lower low
– Look for a big fat rejection candle and enter long position targeting the bottom of the candle
– Target a 1:2 risk to reward ratio

Hidden Bearish Divergence
– Look for a trend of lower highs in price action
– Check the RSI levels for a higher high
– Look for a big fat rejection candle and enter short position targeting the top of the candle
– Target a 1:2 risk to reward ratio

Conclusion
– Trading with the trend increases probability of success
– Hidden divergences can help identify trend continuation
– Use a 1:2 risk to reward ratio and exit 90% of trade at target
– Don’t be greedy and take profits when you can.