Convergence Divergence Trading
Divergence and Convergence on a financial market occur when buy or sell orders are reaching a saturated amount.
On an upward trend, if tendency to place further buy orders decreases considerably and numerous traders close their Buy orders in spite of more upward movement then a Divergence in the market is formed and can be detected by some powerful indicators.
Convergence happens when the tendency for more Sell orders decrease substantially and huge amount of Sell orders are closed on a downtrend even if market price continues its downward direction.
Reliable and Strong trading signals can be generated by applying Convergence and Divergence alongside of other confirmations.