1.What all technical analysts most desire is to make trades by knowing in advance that a downtrend or an uptrend will change.

2.If you know in advance that a downtrend will change to an uptrend, you can buy, and if you know in advance that an uptrend will change to a downtrend, you can sellm so you will become a god in trading and become rich.

3.Of course, it is impossible to know perfectly in advence.

4.If the trend is slowing, momentum is slowing, buying or selling trends are weakening, or a combination of these phenomena is occurring, it is reasonable to think that the trend may reverse in the near future. This is divergence.

5.When applied to a trend indicator, if a divergence is occurring, the trend has slowed, and when applied to a momentum indicator, momentum has slowed.

6.In other words, divergence can be applied to various indicators, and the more complex it appears, the greater the probability of a trend reversal.

7.The price trend is continuous. If an upward trend is to be broken and converted into a downward trend, it must be broken immediately, so there is a process of slowing down the upward trend.

8.The same goes for momentum and trading volume. Divergence captures this.

9.Of course, even if the trend slows down, the trend does not always reverse. For example, if a strong upward trend continues and encounters resistance, the trend will temporarily slow down, but if resistance is eventually broken through, the trend may revive. However, from a trader’s perpective, if resistance is reached and the trend slows down, selling once and buying after the resistance is broken will increase the expected probability of return.

10.In other words, even if a trend reversal cannot be achieved, it is important to utilize divergence even from a risk management perpective.