Advanced Divergence Trading

What is Divergence?
Divergence happens when the price moves in the opposite direction of an indicator (like RSI, MACD, or Momentum). It signals a possible trend reversal or trend weakening.

🔹 Types of Divergence:

Regular Divergence (Trend Reversal):

Bullish: Price makes lower lows, but indicator makes higher lows → Reversal up

Bearish: Price makes higher highs, but indicator makes lower highs → Reversal down

Hidden Divergence (Trend Continuation):

Bullish: Price makes higher lows, indicator makes lower lows → Trend continuation up

Bearish: Price makes lower highs, indicator makes higher highs → Trend continuation down

🔹 Advanced Tips:

Use on higher timeframes for accuracy

Confirm with volume, trendlines, or price action

Combine with support/resistance or Fibonacci zones

🔹 Pro Tools to Use:

RSI (Relative Strength Index)

MACD (Moving Average Convergence Divergence)

Stochastic Oscillator

OBV (On Balance Volume)