When you’re basing your trading around a day trading chart and making short term trades for fast profits, it’s critical to have the best info. This implies backing up your system with cross checks against other signals. Sometimes these other indicators can point up circumstances or patterns that show you when a trend might be about to break. One of these patterns is divergency.
Divergence isn’t in itself something a trader would base a system around. It is more of a secondary signal that attests or challenges the signals that you already have. But do not belittle its power on this basis. If it doesn’t, you can hold back and likely protect yourself from a loss-making trade. I don’t need to tell you how this may add to your profits on the base line.