[ATNET Crypto Trading Glossary] Exaggerated divergence

jargon     · [technical]
What do crypto traders call Exaggerated divergence and how to read it?
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As any divergence, the Exaggerated Divergence a divergent development of price as compared to an oscillator.

Exaggerated divergence works like a regular divergence, except that price makes double top or double bottom rather than new high or new low.

For example: In regular bullish divergence, the price makes a lower low while an oscillator makes higher low, which is the bullish signal. An exaggerated divergence would show a double bottom while an oscillator would make higher low. Double bottom by itself is bullish, which is why the divergence is seen as stronger than a regular bullish div - hence the name.

For a more advanced analysis you can also look for divergences relatively to bbands instead of in plain price terms.

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