Divergence is simply a different trend between prices and indicators.
Prices hit new highs but indicators are falling, or prices are falling but indicators are rising.
In short, due to the influence of certain factors, indicators cannot keep pace with prices.
Foreign exchange divergence can be divided into top divergence and bottom divergence.
A top divergence is when a new high has been reached, but the index has not yet reached a new high.
Usually, a top divergence sends a sell signal.
The bottom deviation is the opposite of the top deviation.
When the exchange rate reaches a new low and the index no longer reaches a new low, a buy signal is issued.
A bottom divergence chart usually occurs during a downward trend.
The low of the stock price is lower than the other, but the high of the index is higher than the other, which means that the bears are getting weaker and the bulls are getting more dominant, which suggests that the downtrend may reverse and a rally may follow.
