Charting and Studies User Guide - CQG.com

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Divergence Index (Diver)
The Divergence Index represents a measure of the divergence between two sets of values
(typically between prices and an oscillator). The Divergence Index ranges from +100 to –100.
Divergence is measured at the right-hand point of the trend lines of every peak that is
confirmed by one lower high to the right. Therefore, the divergence signal does not occur until
the close of the bar following the current peak. This peak represents the potential significant
reversal point.
To better visualize what the Divergence Index measures, imagine a trend line drawn between
the number and the first circle to its left and a corresponding trend line drawn on the oscillator
covering the same time frame. If the slopes of these two lines are identical, the Divergence
Index value equals zero.
For price peaks, if the slope of the trend line drawn on the bar chart is greater than the slope of
the trend line drawn on the oscillator, the Divergence Index will be positive. The larger this
difference, the greater the Divergence value. Likewise, if the slope the trendline drawn on the
bar chart is less than the slope of the trendline drawn on the oscillator, the Divergence Index
will be negative. Furthermore, if the slope of the trend line on the bar chart is upward and the
slope of the trendline on the oscillator is downward, the divergence is referred to as classic.
Some market theoreticians believe that a large positive classic divergence (positive bar slope,
negative oscillator slope) occurring at a price peak indicates a greater chance for a price
Basic Studies