You know that indicators are used to predict the price direction. It's the first signal that traders should bet on the upward rally. At the same time, the indicator you chose has higher lows. It's a market situation in which the price forms lower lows. Bullish DivergenceĪ bullish divergence can also be called convergence.

The idea of regular divergence is to predict a potential price reversal. The idea of regular divergence is to predict a weakening trend and potential price reversal. Regular divergence is the easiest form of divergence that can be found on the chart, so we'll start with it. If bullish divergence occurs, we look at the price chart's lows. With a bearish divergence, we consider the price's extremes. Both types have two forms: regular and hidden. There are two main types of divergence: bearish and bullish. It only provides necessary information about the foreseen price direction that can be used to open or close a trade.īecause divergence provides signals on the price direction, there are different types of it you should know about. The signal of the upcoming price movement is read from this divergence.ĭivergence should be used to define accurate entry/exit points. The indicator is usually an oscillator placed below the price chart, so you can easily see divergence without applying additional tools.ĭivergence is a market condition in which the price and the indicator go in different directions. The signal of the upcoming price movement appears from this divergence. The concept is simple, and that's why it's loved by traders worldwide.ĭivergence is a market condition in which the price and the indicator diverge or go in different directions. What Is Divergence in Trading: Definitionĭivergence is one of the most effective and common market conditions that provide reliable trading signals on the price reversal and market retracement depending on the divergence type. In our tutorial, we'll uncover all the secrets of using divergence effectively and applying profitable strategies. However, like any other technical concept, it has features that should be noticed before using it. Investors like divergence because it can be used both as a signal confirmation and a stand-alone signal. Divergence is one of the well-known market conditions that provide reliable signals on the upcoming market direction. In analytics, there's a chance you'll come across the term divergence.

Daily bullish divergence rsi