Divergence

Compare corresponding points

Record whether the comparison uses closes, wicks, local indicator extremes or indicator values at price swings. Specify minimum separation and ties. Changing point selection can create or remove divergence without changing the market history. Price and indicator points should not be selectively paired because they produce a convincing picture.

Classical and hidden forms

Classical bullish divergence combines a lower price low with a higher oscillator low; bearish divergence combines a higher price high with a lower reading. Hidden bullish divergence commonly pairs a higher price low with a lower indicator low; the bearish version reverses those relations at highs. These are separate labels requiring separate evaluation.

Repeated warnings

Divergence can recur while a trend continues. An oscillator summarises a selected price feature, not every measure of dynamics simultaneously. Price may reverse, slow or continue. A structural confirmation rule adds another condition and may delay entry; it does not guarantee that false events disappear.