Advance divergence

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Strong divergence is the most reliable type of divergence, often signaling a significant reversal. It occurs when the price makes a new high or low, but the indicator fails to do so, indicating weakening momentum.

Traders use divergence to assess the underlying momentum in the price of an asset, and for assessing the likelihood of a price reversal. For example, investors can plot oscillators, like the Relative Strength Index (RSI), on a price chart.