How do you distinguish a retracement from a trend reversal?

Its not 100% reliable, but hidden divergence can help.

the ABC pattern can be usefull,
just wait until it has completed and take it from there,
before that it's allmost impossible to say,
but as a general rule, you should seriously consider a trend change
once the previous major low has been taken out and candles closed below it.
look into Elliot waves, there is a lot of free reading on the net
yes divergence is another thing you could use.
but only as confirmation don't take trades only because of divergence.

retracement will be when a trend continues and dose not break, and a reversal will be when the is a sustained break from the trend line you have drawn (assuming you do).

another view is that it depends which wave you would be watching and TF