Market Cipher B/
Divergences
TL;DR
Divergences in Market Cipher B are drawn as lines connecting momentum swing points that conflict with price swing points. A bullish divergence (green line) forms when price makes a lower low but the oscillator makes a higher low — signalling weakening bearish momentum. Bearish divergences (red) signal the opposite.
↘ BEARISH DIVERGENCE
↗ BULLISH DIVERGENCE
How It Works
- 1
A divergence occurs when price and the momentum indicator (Wave Fast / Money Flow) move in opposite directions — disagreement between price action and underlying strength.
- 2
Bullish Regular Divergence: price prints a lower low, but the oscillator prints a higher low — selling momentum is fading, reversal probable.
- 3
Bearish Regular Divergence: price prints a higher high, but the oscillator prints a lower high — buying momentum is fading, reversal probable.
- 4
Hidden Bullish Divergence: price prints a higher low, oscillator prints a lower low — trend continuation to the upside is likely.
- 5
Hidden Bearish Divergence: price prints a lower high, oscillator prints a higher high — trend continuation to the downside is likely.
- 6
MCB draws coloured lines between the two pivot points (both on price and on the oscillator) to make divergences visually immediate.
Divergence detection is one of LiquidMind's highest-conviction overlay signals. When a bullish regular divergence coincides with a POI (e.g., EQL or Breaker Block), the system assigns a maximum confidence boost to the entry signal. The AI engine uses the Wave Fast oscillator as the divergence measurement surface, comparing momentum highs/lows across the last 5–20 bars. Only divergences confirmed by a follow-through displacement candle are stored and acted upon — unconfirmed divergences are flagged as 'watch alerts' only.