Divergence is a term used in technical analysis when the price of an asset and a technical indicator move in opposite directions. This could signal that the price trend is weakening and could potentially reverse, although divergence can persist for a while in strongly trending markets. Traders often use divergence to help them enter or exit a trade, particularly if they want to catch a trend reversal. However, it should not be solely relied upon for trading decisions.
Conversely, convergence occurs when the price of an asset and a technical indicator moves in the same direction. This can be used to confirm an entry signal or to reaffirm a trader's decision to stay in a position. Like divergence, convergence should not be solely relied upon for trading decisions.
