Volume and Momentum Divergences
A divergence occurs when two selected measures do not make corresponding extremes, such as a higher price high with a lower momentum high. It describes disagreement, not a confirmed reversal.
How it works
Fix the pivot definition, comparison window and indicator settings before selecting examples. Indicators derived from price are not independent observations of a hidden market force. Volume measures add different information but still depend on the feed and session. Record when both compared pivots became confirmed.
Worked example
Price peaks at 100 then 105 while RSI peaks at 72 then 65. This fits one bearish-divergence description after the second pivots are confirmed. Price can still rise to 110. A separate rule requiring a close below an intervening low may confirm a different event later; do not pretend the original divergence predicted it with certainty.
Amounts, prices and scenarios are fictional teaching examples. They exclude any effects not explicitly stated and are not trade recommendations.
Limits and common mistakes
Divergences can persist through strong trends and analysts can choose favorable pivot pairs retrospectively. Testing many indicator settings and showing only attractive examples overstates evidence. Include non-reversing cases in the sample.
Knowledge check
Does a lower RSI high imply that the price must immediately fall?
Read the explanation
No. It indicates a weaker relative gain/loss measure at the selected observations. Price can continue rising despite that change.
References and further reading
These sources explain the underlying concepts and specifications. They do not endorse QBMFX Academy. Check the relevant market, protocol version and reporting rules before applying an example.