When you see Divergence appear, most traders often feel excited because it signals a change in the market. But before rushing to open a position, you need to understand what type of Divergence you're seeing, as there are two completely different types.

Divergence occurs when the price and an indicator disagree. The price moves in one direction, but indicators like RSI or MACD move in another. This indicates that something is changing in the market's momentum.

There is Bearish Divergence that occurs at the end of an uptrend. The price continues to rise and makes new highs, but the indicator begins to show weakening signals. It does not follow the upward movement. Bearish divergence is a warning sign that the uptrend may be losing strength and the price could reverse downward.

Conversely, Bullish Divergence occurs at the end of a downtrend. The price continues to fall and makes new lows, but the indicator starts to show decisive signs. It does not confirm the strength of the decline. This indicates that the downtrend is weakening and the price may be ready to reverse upward.

But that's not all. There is another type called Hidden Divergence, which is the opposite of Regular Divergence. Hidden Divergence indicates that the trend is not over yet. The indicator still shows the strength of the original trend, even if the price makes a slight correction.

For example, if the price makes a weaker high (a lower high than before), but RSI still shows a strong upward movement, this is Hidden Bullish Divergence. It suggests that the uptrend will continue.

When trading Regular Divergence, wait for the price to show clear reversal signals, such as a green candle after a new low. For Hidden Divergence, prepare for the continuation of the existing trend when the price breaks out of its range.

Indicators that work well for observing Divergence include RSI, especially when it enters the Overbought (above 70) or Oversold (below 30) zones, or MACD, which shows changes in its lines. Williams %R also works effectively.

The important thing is that Divergence is not a 100% accurate signal. Sometimes it occurs multiple times before the price actually changes direction. Therefore, it should be combined with other tools, and most importantly, have a good stop-loss point. Do not risk more than you can afford.

If you understand Divergence well—knowing when it's Regular, when it's Hidden, and managing your risk—this tool can help improve your trading efficiency. Try observing Divergence on your charts; it might be the turning point for your next profit.