Divergences can be the birth of a new trend. However, they are MORE reliable on the higher TFs than your trading/entry chart (if you you're using MTF analysis, which everyone should!). I've tried trading divergences only and they can be VERY misleading. Just because they occur doesn't guarantee price to reverse. The best way to determine whether price will reverse is to follow Market Structure and to wait till Lower Highs (LH) and and Higher Lows (HL) are broken. And the best way to determine LHs and HLs is using the OSMA or a newer MACD.

Below is an example of how to properly read Market Structure. I mark the Lows and Highs using the OSMA. Also, it must be at least 3 bars on the OSMA for a Low or High to be legitimate. After these ares are marked, I wait for structure to be broken and this is how I determine a reversal is eminent! I have also found that using currency strength via profiling helps determine what pairs to trade and Market Structure helps determine when to enter trades. This has lead to consist profits week after week. IMO, it's a better way to trade. Also, if you incorporate MTF, it's amazing!!!!! Divergences can help, but Market Structure being broken is more of a guarantee.

If you study this concept, you will become profitable!!!!