Banknifty , Crude oil and Copper Divergence Divergence is a technical analysis concept that occurs when the price of an asset and a technical indicator move in opposite directions. It's a sign that the price of an asset may be reversing, and it can help traders recognize and react to price changes.
Here are some things to know about divergence:
#Types of divergence
There are two types of divergence: negative and positive. Negative divergence happens when the price of a security is rising, but an indicator is falling. Positive divergence happens when the price of a security is falling, but an indicator is rising.
#When to use divergence
Divergence can help traders make decisions like tightening stop-loss or taking a profit.
#How to confirm reversals
Divergence can occur over a long period of time, so traders can use other tools like trendlines and support and resistance levels to confirm reversals.
#When to use convergence
Convergence is when the price of an asset, indicator, or index moves in the same direction as a related asset, indicator, or index
