Divergence is a trading pattern wherein the price of an asset and an indicator move in opposite directions. There are two types of divergence: positive divergence and negative divergence. Positive divergence happens when the price of an asset makes a new low while the indicator is surging upward. Negative divergence takes place when the price of an asset makes a new high and the indicator is moving downward.

A positive divergence happens on the chart above. Prices of gold is making lower lows while the MACD is forming a series of higher lows.

A negative divergence occurs on this chart. The indicator fails to move upward as the prices of coffee make new highs. This type of movement signals a downtrend afterwards.

This entry was posted in Uncategorized. Bookmark the permalink.

6 Responses to Divergence

  1. I’ve recently started a blog, the information you provide on this site has helped me tremendously. Thank you for all of your time & work.

  2. admin says:

    You’re welcome. It was nice to hear that from you.

  3. I cant say Im in complete accordance, props to you for taking the time to throw it up

  4. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It?s the old what goes around comes around routine.

  5. Uk 106 says:

    Great ideas, thanks for showing the initiative to throw it up

  6. Used Peugeot says:

    Lovely post, thanks are in order for taking the time to throw it up

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>