What is the Knoxville Divergence?
The appearance of Knoxville Divergence, developed by Rob Booker, is the suggestion that price is set to reverse course. It is a counter-trend indicator.
This means that if price has been moving upward on the 240-minute chart above, and we see a Knoxville Divergence line above price, it is a suggestion that price is possibly going to move lower in the near future. Because of this, it is a useful indicator for counter-trend traders, or trend-traders who want to look for a pullback before they enter a trade with the longer-term trend.
How is Knoxville Divergence Built?
Knoxville Divergence is comprised of two elements:
- Momentum indicator. The momentum indicator - when price is rising, but the momentum indicator is falling, this is a first sign that we could see Knoxville Divergence appear on the chart. But it's not enough by itself.
- Relative Strength Index. If, at the same time we see the disagreement between price and the momentum indicator, we also see the relative strength index go overbought or oversold, then we have the second necessary element for KD and a KD line will appear on the chart.
What Time Frames are Best for Knoxville Divergence?
Rob Booker uses Knoxville Divergence on the 1-minute charts all the way up to the monthly charts.
What Financial Instruments Work with Knoxville Divergence?
Rob Booker has been using Knoxville Divergence with stocks, mutual funds, bonds, futures, currencies - everything - for years.
How does this work with the MetaStock?
Using Knoxville Divergence with the MetaStock Explorer will let you search through any market you are interested in and identify those securities that are exhibiting a Knoxville Divergence.
MetaStock will automatically find, label, and chart the Knoxville Divergences.
About Rob Booker
Rob Booker is an accomplished author, trader, and podcast host. He travels all over teaching his unique strategies for trading.