Please keep in mind that we utilize divergence as an INDICATOR, not as a signal to enter a trade!

It would be foolish to trade just on divergences because there are far too many false signals.

It’s not 100% infallible, but when utilized as a setup condition and supplemented with additional confirmation techniques, your trades have a high possibility of winning with relatively modest risk.

There are numerous strategies to capitalize on the divergences.

One method is to use trend lines or candlestick patterns to determine whether a reversal or continuation is needed.

Another method is to utilize momentum techniques, such as looking for a genuine crossover or waiting for the oscillator to move out of the overbought/oversold zone.

You can also try drawing trend lines on the oscillator too.

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On the other hand, trading against this indication is just as risky.

If you’re not sure which way to go with your trade, sit it out.

Remember that not taking a position is a trading decision in and of itself, and it’s better to keep your money than lose it on a dubious trade idea.

Divergences don’t happen very often, but you should pay attention when they occur.

Regular divergences can help you make a lot of money since you can jump in precisely when the trend changes.

By keeping you on the right side of a trend, hidden divergences can let you ride a trade for longer, resulting in larger-than-expected returns.