🔹Divergence
What is Divergence?
Price is in an uptrend & momentum indicator making a High & Lower High
Price is in a downtrend & Momentum indicator is making Low and Higher Low
How do oscillators indicate divergence?
Indicators like Bill Williams, Awesome Oscillator (AO) to measure divergence.
Role of Divergence in Chart Analysis
Bearish Divergence indicates Correction in an uptrend
Bullish Divergence indicates Correction in a downtrend.
In wave patterns, divergence helps to locate the 5th wave of the Motive wave as the 5th wave usually shows a lowering of momentum which is visible through divergence appearing in an oscillator. Recommended indicators to use for divergence are Awesome Oscillator, RSI, and Momentum.
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