In trading, divergence is a concept that forms on your chart and results from the price action of a security moving in opposite direction to the indicator value.
What you need to know is that positive ( ) divergence happens only when the securities price shifts lower while the indicator starts to rise. This indicates a weakness in the downtrend.
On the other hand, negative ( ) divergence occurs when the securities price rises to a new high while the indicator fails to achieve the same momentum. This indicates a weakness in the uptrend.
Now since this is an automated detection, it may not signal the divergence for its entire length. You can also spot/chart divergences manually by drawing on price action and bullfillter values.
Then comparing the bullfilter value against the price to see if they diverge. An example of that is shown here https://www.tradingview.com/chart/XBTUSD...
These divergences also go hand in hand with our other premier indicator https://www.tradingview.com/script/zZQ4R.... They can be used to filter out a potential long entry. I.e. do not long if a divergence is present, and vice versa do not short if a is present.
To use this in your trading strategy, a short when divergence begins/long when begins. The second divergence in a row is usually more accurate for a larger move. If entering a trade off the first divergence its recommended to exit it quickly and take profit.
The higher the timeframe you are on the more weight the divergence has. On sub 30m timeframes they are not particularly useful, and may signal too often or without effect.