Divergence Trading
Identify regular and hidden divergences across RSI, MACD, Stochastic, and OBV for reversal and continuation signals. Use when price makes new highs/lows but indicators disagree, or when confirming trend exhaustion.
Install
$ agentstack add skill-ske-labs-agent-trading-skills-divergence-trading ✓ scanned · ✓ verified — works with Claude Code, Cursor, and more.
Security review
✓ PassedNo issues found. Passed automated security review. · v0.1.0 How review works →
- ✓ Prompt-injection patterns
- ✓ Secret / credential exfiltration
- ✓ Dangerous shell & filesystem operations
- ✓ Untrusted network calls
- ✓ Known-malicious package signatures
What it can access
- ✓ Network access No
- ✓ Filesystem access No
- ✓ Shell / process execution No
- ✓ Environment & secrets No
- ✓ Dynamic code execution No
From automated source analysis of v0.1.0. “Used” means the capability is present in the source — more access means more to trust, not that it’s unsafe.
About
Divergence Trading
Divergence occurs when price and an indicator move in opposite directions, signaling potential trend change or continuation.
Divergence Types
Regular Divergence (Reversal)
| Type | Price | Indicator | Signal | | --- | --- | --- | --- | | Bullish Regular | Lower Low | Higher Low | Momentum weakening, potential reversal up | | Bearish Regular | Higher High | Lower High | Momentum weakening, potential reversal down |
Hidden Divergence (Continuation)
| Type | Price | Indicator | Signal | | --- | --- | --- | --- | | Bullish Hidden | Higher Low | Lower Low | Uptrend pullback ending, continuation up | | Bearish Hidden | Lower High | Higher High | Downtrend rally ending, continuation down |
Multi-Indicator Detection
| Indicator | Best For | Extreme Zone | | --- | --- | --- | | RSI | OB/OS exhaustion | 70 for regular div | | MACD histogram | Momentum shifts | Compare histogram peaks/troughs with price | | Stochastic | Ranging markets | 80 (skip mid-range div) | | MFI (volume proxy) | Smart money confirmation | Rising MFI + falling price = accumulation |
Strength: 1 indicator diverging = note only. 2 = trade with confirmation. 3+ = high probability.
Validation Rules
- Minimum 5 candles between comparison points (fewer is noise)
- Maximum 50 candles between comparison points (too far = weak)
- RSI must be in extreme zone (70) for regular divergence
- If RSI crosses 50 between the two points, divergence is invalidated
- Both price swings must be visually clear, not micro-swings
Workflow
- Get indicator data:
`` get_indicators(indicator_code="rsi", symbol=, exchange=, interval=) get_indicators(indicator_code="macd", symbol=, exchange=, interval=) get_indicators(indicator_code="stoch", symbol=, exchange=, interval=) ``
- Compare swings: For each indicator, identify last two significant peaks/troughs and compare direction vs price direction
- Score: Count diverging indicators (1-3). Check if at key S/R level for bonus confluence.
- Get candles for chart drawing:
`` get_candles_around_date(symbol=, exchange=, interval=, date=) ``
- Mark divergence on chart:
`` draw_chart_analysis(action="create", drawing={ "type": "trend", "points": [ {"time": , "price": }, {"time": , "price": } ], "options": {"text": "Bullish Divergence (RSI + MACD)"} }) ``
- Wait for confirmation candle (engulfing, hammer, pin bar) at the divergence zone before entry
Key Rules
- NEVER trade single-indicator divergence alone; require 2+ indicators
- NEVER trade mid-range RSI divergence (RSI 40-60 is meaningless)
- NEVER enter without a confirmation candle; divergence is a warning, not an entry
- Higher timeframe divergence is far more reliable than LTF; use 1H+ minimum
- Divergence can persist in strong trends; use hidden divergence (continuation) in trends, regular divergence only at extremes
- Entry on confirmation candle close; stop beyond the second divergence swing point
Related Skills
- rsi-divergence — focused RSI divergence framework; this skill extends it to multiple indicators
- macd-trading — MACD histogram divergence is one of the four indicators in multi-indicator scoring
Source & license
This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.
- Author: SKE-Labs
- Source: SKE-Labs/agent-trading-skills
- License: Apache-2.0
Install and usage instructions live in the source repository linked above.
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Versions
- v0.1.0 Imported from the upstream source.