Divergence
NeutralReliability: MediumAlso called · RSI divergence, MACD divergence, bearish divergence
Price and an indicator moving in opposite directions.
How to spot it
- Price makes higher highs while RSI makes lower highs (bearish divergence)
- The reverse is bullish divergence
Why this shape forms
Price makes a new extreme and the oscillator does not follow. The move looks the same on the surface while losing force underneath.
Where it actually means something
Only worth reading after an extended trend. Divergence over short spans appears almost constantly and fails almost constantly.
What else to check
Do not act on divergence alone; wait for price itself to break something. Divergence is a warning, not a trigger.
This means you're wrong
If price simply continues its trend, the divergence dissolves.
The mistake beginners make
Fading a trend on divergence alone. In a strong trend it gets ignored repeatedly.
Easy to confuse with
Strong trends print divergence repeatedly and keep going. Leaning against it on that basis is how people take large losses.
Real examples from the community
Patterns are probabilistic tendencies, not guarantees. This is not investment advice.