Disliked{quote} Mike, What is actually happening when divergence occurs? Thank you! KennyIgnored
Divergence occurs when price begins showing a failure of being able to sustain new highs or lows in a move.
So if price is moving upwards but every time price makes a new high it begins to then stall(or even better fall back down), this shows a lack of enthusiasm from the buyers so we then infer momentum can be fading.
It's as simple as that in my book. Of course we have divergence that is stronger and weaker and everything in between like all concepts in trading
Hope that helps
Mike