What it means
Divergence describes a difference between price movement and an indicator reading. In RSI analysis, divergence may appear when price makes a new high or low but RSI does not move in the same way.
Why it matters in live markets
Divergence can suggest that momentum is changing, but it does not guarantee a reversal or continuation. It is best treated as context that should be compared with broader price structure.
Key points
- Divergence compares price movement with an indicator.
- RSI divergence is a common example.
- It may suggest momentum is changing.
- Divergence can appear early or repeat several times.
- It is not a standalone trading signal.
Example
If price makes a higher high but RSI makes a lower high, some traders may describe this as divergence between price and momentum.
Related glossary terms
Relative Strength Index, Momentum, Oscillator, Overbought, Oversold, Volatility
Where you will see it
You will usually see divergence discussed in RSI education, momentum analysis, chart reviews, and technical indicator guides.