The name of this pattern speaks of its character. We have a divergence when the price movement is contrary to the indicator movement. This type of Regular Divergence pattern comes in two forms
Two types of Divergence:
Each type of divergence will contain either a bullish bias or a bearish bias
A divergence is what happens when the price of an asset is moving in the opposite direction to a momentum indicator or oscillator.
It is the opposite of a confirmation signal, which is when the indicator and price are moving in the same direction.
When divergence is spotted, there is a significant chance of a price retracement.
There is a positive and negative divergence.