here is an example on gbp-jpy: daily and h4 timeframes (please note the ratio between them, it is 1:6... 1 daily bar = 6 h4 bars).
notice the HIDDEN bullish divergence on daily.
then focus on the last move, but on h4. i circled it. you are basically looking for a REGULAR bullish divergence on h4. it is confirmed when the trendline of the move is broken. enter ONLY on confirmation.
basic principle: look for a hidden divergence on higher timeframe, then go to the next lower timeframe and wait for the regular divergence. both divergences must of the same kind: either both bullish, or both bearish.
you can use this technique with ANY pair of timeframes, as long as their ratio is 1:5 or 1:6... 1min/5min, 5min/30min, 40min/h4, h4/daily, or daily/weekly.
hope this helps.
Quote:
Originally Posted by zorak
Hi,
Would someone be kind enough to illusterate graphically using chart example(s) to show how to confirm divergence using lower timeframes?
Many thanks in advance!
Good trading
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