I see many have trouble interpreting divergence signals, here's what you need to look for with divergence.
Regular/Classic Bearish Divergence
Higher highs in price and lower highs in the oscillator means the current up trend could be turning down (bearish)
Regular/Classic Bullish Divergence
Lower lows in price and higher lows in the oscillator means the current down trend could be turning up (bullish)
Hidden Divergence
Regular/Classic Bearish Divergence
Higher highs in price and lower highs in the oscillator means the current up trend could be turning down (bearish)
Regular/Classic Bullish Divergence
Lower lows in price and higher lows in the oscillator means the current down trend could be turning up (bullish)
Hidden Divergence
- Lower highs in price and higher highs in the oscillator suggest a continuation of the down trend.
- Higher lows in price and lower lows in the oscillator suggest a continuation of the up trend.
Remember that you need to focus on the highs for regular bearish divergence and the lows for regular bullish divergence.
With regular bearish divergence the price MUST be making a higher high.
With regular bullish divergence the price MUST be making a lower low.
Never place a trade based on a divergence signal, you must confirm the divergence with a break of support/resistance before it is confirmed divergence.
Some further reading if you still need help:
BabyPips.com
Trading-Naked.com