Our team of Chartered Market Technicians (CMT) devised the concept and
formula of a “Filtered Divergence”, which is a simple yet incredibly effective trading
signal. In its simplest terms, a Filtered Divergence occurs when both the Indicator
and Price register simultaneous pivots at both the start and endpoint of a
divergence. Filtered Divergences are vastly superior to standard divergences
since they ensure that price also registers a pivot high or pivot low. We strongly
recommend that you place much more emphasis on locating Filtered Divergences
as opposed to just any ordinary divergence. You will notice that Filtered
Divergences are much more predictive (often marking major price highs/low) and
accurate (higher rate of follow-through).