What does divergence mean?

Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction. There is positive and negative divergence.

What is divergence in forex trading?

Divergence is a trading phenomenon that offers reliable and high-quality information regarding trading signals. It refers to when an asset’s price moves in the opposite direction to the momentum indicators or oscillators.

What is a divergence signal?

A divergence signal is generated when the price is making a higher swing high but the indicator is making a lower high, or the price is making a lower swing low when the indicator is making a higher swing low, thus indicating a potential divergence trading strategy. This implies that the price swing is losing momentum and is likely to reverse soon.

Is stochastic divergence better?

The stochastic is a more sensitive indicator, meaning it will offer more divergence signals and thus more trading opportunities but that also means more false signals. Is trading divergence profitable?