Divergences

The Haromy Oscillator can show Regular and Hidden Divergences on either the Strength Oscillators. Strength Divergences usually show Momentum changes and can be an early warning sign of a reversal. Trend Divergences show a significant breakdown of the Trend and act as a confirmation of price reversal.

Divergence Modes:

Strength - This calculates Regular or Hidden Divergences depending on whether those are ticked on or off based on the Strength Line

Trend - This calculates Regular or Hidden Divergences depending on whether those are ticked on or off

Divergences are often used as an early warning system for a potential price reversal, we recommend always waiting for confirmation as Price breaks some form of structural support.

Regular / Hidden

Divergence is when the price of trading pair is moving in the opposite direction of the Oscillator. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction.

There is Bullish and Bearish divergence. Bullish divergence indicates a move higher in the price of the asset is possible. Bearish divergence signals that a move lower in the asset is possible.

Bullish Regular divergence is the pattern that occurs when the price falls to lower lows, while the technical indicator reaches higher lows. This would be seen as a sign that market momentum is strengthening, and that the price could soon start to move upward to catch up with the indicator.

Bearish Regular divergence is the pattern that occurs when the price reaches higher highs, while the technical indicator makes lower highs. Although there is a bullish attitude on the market, the discrepancy means that the momentum is slowing. Therefore it is likely that there will be a rapid price decline.

While regular divergence often indicates trend reversals, hidden divergence tends to be a continuation indicator that shows when an opportunity to take advantage of a pullback in a trend may exist. This means that a trader can now choose to enter the market in the direction of the trend to profit from its continuation.