Price and the indicator pointing in different directions
Divergence is when price makes a new high while the indicator makes a lower one, or the reverse. It is read as a sign that the move may be losing momentum. Price often keeps going after divergence appears, so on its own it does not mean the direction has changed. It is used together with RSI or MACD.
Price rising from 1,000 to 1,100 while RSI slips from 80 to 70 is a divergence.
For learning, not investment advice. Decisions are your own.
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