What does a divergence pattern mean?

Divergence patterns indicate that a reversal is coming soon and becoming more likely but this is not an instant change. The more divergence there is visible, the more likely a reversal does become. Here are some guidelines: The entry can not be taken on the basis of divergence indicator alone.

What are the different types of divergence?

Regular divergence is also known as the classic divergence. Hidden divergence. The divergence cheat sheet table below outlines the different types of divergence and the signals they generate. Regular divergences can be further classified into regular bullish divergence and regular bearish divergence:

What is a positive divergence?

Divergence compares the patterns between the price of an asset and a technical indicator. It is most apparent when the asset price is moving in the opposite direction of what the technical indicator states. Positive divergence signals potential positive uptrend in price momentum, which can be bullish.

What is the difference between divergence and convergence?

Divergence typically means two indicators are moving apart, while convergence shows how they move together. Thus, convergence is the opposite of divergence. It describes the phenomenon of the price of a futures contract moving toward the spot or cash price of the underlying asset over time.