// Definition
Divergence is when price and an indicator such as RSI move in different directions, which can be an early sign that a move is losing strength.
Explained simply
Bearish divergence: price makes a higher high, but RSI makes a lower high. The rally continued, but with less momentum. Bullish divergence is the opposite: price makes a lower low while RSI makes a higher low.
Divergence warns that momentum is fading. It does not tell you exactly when the reversal will start.
Tip
Wait for a structure change, such as a broken higher low, before trading a divergence.
For education only, not financial advice. Trading is risky and you can lose money.