Divergence Type

1.A general downward divergence is said to have occurred when the high point od the price rises, but the indicator fails to keep up and the high points falls.

2.For example, a trend indicator means that the price has updated its high point, but the trend has not renewed its high point.

3.This mean that prices have risen, but the upward trend has slowed, implying that the trend may reverse in the near future.

4.A general upward divergence is when the low point of the price falls but the low point of the indicator rises, implying that the downward trend may slow down and the trend may reverse in the near futures.

5.If it occurs in a trading volume indicator, it means that the buying of selling trend is weakening compared to the direction of the price, which means that the trend may be reversed. if it occurs in a momentum indicator, it means that the momentum may slow down and reverse.