Divergence is a powerful tool that can help you spot potential reversals and trend continuations in Forex trading. It occurs when the price action of a currency pair moves in the opposite direction of an indicator, such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD). For example, if the price is making higher highs while the RSI is making lower highs, this is a bearish divergence, signaling a potential reversal. On the other hand, bullish divergence occurs when the price makes lower lows, but the indicator makes higher lows. Divergence is most effective when combined with other forms of analysis, such as support and resistance levels or candlestick patterns. Use it to confirm your trades and enhance your strategy. Master divergence, and you’ll gain a valuable edge in the market.