WickCheck / Trading school / Divergence
DivergenceIntermediate
Price makes a new high or low but an oscillator does not.
What it means
Bearish divergence: higher high in price, lower high in RSI. It hints that momentum is fading, but trends can diverge for a long time.
How to spot it
- Compare two swing highs (or lows) in price and in the indicator.
Common mistakes
- Fading every divergence in a strong trend.
Related terms
RSIA 0–100 oscillator that compares recent gains with recent losses.…MACDThe gap between a fast and a slow EMA, with a signal line and histogram.…SMT divergenceWhen two related markets disagree: one makes a new high (or low) and the other d…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.