M5 prints a sell divergence while M30 prints a buy — what would you do? - page 2

[Conor Mcnamara]

Le Uyen Phuong Nguyen #:
Yes, thank you. I will pay more attention to the higher timeframes as you suggested. H4 is indeed very important. From my observation of many instances, for example, when H4 gives a bearish divergence signal, price will still continue to push higher at that exact moment. But when the bearish divergence on H4 reaches the 2nd or 3rd candle, price starts to drop extremely deeply – for example, the recent drop in Gold from 4670 to 4450 last Friday.

There's a reason why this activity happens. They're known as liquidity sweeps (or buy side liquidity). The institutions have massive limit orders placed at an area, they induce retail to buy, when the trend is really bearish.