// TRADING TERMINOLOGY

What is Divergence?

When the price of an asset moves in the opposite direction of a technical indicator.

In-Depth Explanation

Divergence is a powerful signal that the current trend may be weakening. For example, if price makes a higher high but the RSI makes a lower high, it is a "Bearish Divergence."

Practical Example

"A bullish divergence on the 4H chart precedes a major reversal in the AUD/USD pair."

Related Terminology

RSI (Relative Strength Index)

A momentum oscillator that measures the speed and change of price movements.

MACD

Moving Average Convergence Divergence; a trend-following momentum indicator.

Momentum

The speed or velocity of price changes in a security or market.

Bull Market

A market condition where prices are rising or expected to rise.

Tradeable Instruments Affected

EUR/USDEuro / US Dollar

GBP/USDBritish Pound / US Dollar

USD/JPYUS Dollar / Japanese Yen

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