“Divergence End” is a well-known high-probability model in the trading community (especially common in Chan Theory).

Since you want to understand this model, why not I spend 1 minute explaining its underlying logic and practical application thoroughly?

🎯 What is “Divergence End”?

Simply put, divergence is “exhaustion of momentum”.

Rising divergence: The price hits a new high, but the upward momentum (such as MACD histogram area, trading volume) cannot keep up with the previous upward strength. This indicates the bulls are running out of steam, and the trend is about to reverse downward.

Falling divergence: The price hits a new low, but the downward momentum weakens significantly. This suggests the bears are exhausted, and the trend is about to reverse upward.

💡 Core mantra: How to use it to catch tops and bottoms?

The essence of this model lies in “comparison” and “confirmation”:

Observe the trend: First confirm that the current market is in a clear uptrend or downtrend.

Identify divergence: Compare the momentum of two adjacent segments moving in the same direction. If the price makes a new high/low but the indicator (such as MACD, RSI) does not make a new high/low, divergence is formed.

Wait for the end (key!): Divergence does not mean an immediate reversal, only a warning! You must wait until the price breaks the structure that destroys the original trend (for example, in an uptrend, breaking below the last significant support, or showing strong reversal candlesticks like engulfing or孕线), this is the confirmation signal of “end”, and also a high-probability entry point.
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