Divergence

2. Configuration Parameters

When using Divergence on the platform, main parameters:

• Timeframe: Recommended from 1h and above to filter market noise and reduce false triggers.
• Max Bar Lookback (Length): Standardly 100 is used, but it can be increased up to 400.
• Divergence Type: Regular (Classic - discrepancy observed when price forms new highs or lows, while indicator demonstrates opposite movement.)

Hidden (Hidden - differs from classic by signaling not a reversal but a continuation of the current trend. It is used to confirm existing trend strength.)

• Signal Type: Selected as Bullish (for long) or Bearish (for short).
• Indicator mode: Cross_only (buy only when the indicator triggers), Trend_Filter (acts as a filter for interaction with other indicators), Trend_for_buy (acts as a mechanism where new trades are opened immediately after closing; this function combines Trend_Filter and Cross_only).

Mastery Secrets

RSI (Relative Strength Index) — Momentum Classic

RSI measures the speed and change of price movements. Divergence on RSI is a signal that trend speed is falling.

• Best advice: Look for divergence only when the first peak (or valley) of the indicator is in the overbought (above 70) or oversold (below 30) zone.
• Nuance: If the second peak of divergence doesn't enter the extreme zone but stays in 'neutral' (between 30 and 70), such a signal is considered stronger because it shows a sharp loss of initiative.

CCI (Commodity Channel Index) — Reversal Master

CCI measures the deviation of price from its average value. It is more 'jittery' and sensitive than RSI.

• Best advice: Use CCI to find sharp divergences in volatile markets (crypto, gold). Due to its sensitivity, CCI often gives a signal earlier than others.
• Nuance: Multi-peak divergences often occur on CCI (three or four peaks). The most reliable entry is when the CCI line crosses the +100 (down) or -100 (up) level after forming a divergence.

3. OBV (On-Balance Volume) — Smart Money Detector

This is a fundamentally different type of divergence. OBV doesn't look at price speed; it looks at volume.

• Signal Essence: If price rises and sets a new high but OBV doesn't, it means large players have started offloading their positions (selling), while price is pushed up by retail on a thin order book.
• Best advice: Divergence on OBV is often leading. It can appear long before RSI or the price chart itself shows weakness.
• Nuance: If you see a divergence on RSI, check it on OBV. If both indicators confirm the discrepancy, it's a 'rock-solid' signal.

Advantages and Disadvantages

Professional Combinations

1. 'Conservative' (Divergence [RSI](/docs/indicators/oscillators/rsi) + [EMA](/docs/indicators/moving_averages/ema) 200)

• Logic: Most reliable entry. Wait for divergence only when price touches EMA 200.
• Essence: You aren't guessing a reversal; you're confirming a bounce off a 'concrete wall'.

2. 'Aggressor' (Divergence [CCI](/docs/indicators/oscillators/cci) + [Stochastic](/docs/indicators/oscillators/stochastic))

• Logic: Finding market 'overheating' outside Bollinger Bands.
• Essence: We enter when CCI has already reversed, while Stochastic just gives a cross in the 80/20 zone.

Option 3. 'Smart Money Detector' (Professional)

Combination: Divergence OBV + Divergence RSI + EMA 20

Here we look for confirmation from volumes. If price grows and money leaves, it's a sure sign of a crash.

How it works:

• Price makes a new high on the chart.
• Divergence on OBV (volume falls).
• Divergence on RSI as well (momentum fades).
• Entry — when price breaks EMA 20 from top to bottom.

• Pro: You see real interest from large players, not just candle 'drawing'.
• Con: Quite rare, which formally will be a plus :)

Handy Cheat Sheet: What works with what