In this episode, Brian discusses divergences in technical analysis and how they can be used to make more informed trading decisions. He explains that divergences occur when the price of an asset moves in the opposite direction of a technical indicator, signaling a potential reversal in the trend. He focuses on two types of divergences; a bullish divergence and bearish divergence. Bullish divergence occurs when the price makes lower lows, but the indicator makes higher lows., indicating a potential reversal to the upside. Bearish divergence occurs when the price makes higher highs, but the indicator is making lower lows, indicating a potential reversal to the downside. Brian also emphasizes the importance of waiting for confirmation before entering a trade and combining divergences with other technical analysis tools.
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