Please keep in mind that we use divergence as an indicator, not a signal to enter a trade!
It wouldn’t be smart to trade based solely on divergences since too many false signals are given. It’s not 100% foolproof, but when used as a setup condition and combined with additional confirmation tools, your trades have a high probability of winning with relatively low risk.
There are a bunch of ways to take advantage of those divergences.
One way is to look at trend lines or candlestick formations to confirm whether a reversal or continuation is in order.
Another way is to make use of momentum tricks by watching out for an actual crossover or waiting for the oscillator to move out of the overbought/oversold region. You can also try drawing trend lines on the oscillator too.
With these nifty tricks, you can guard yourself against false signals and filter out those that’ll be very profitable.
On the flip side, it is just as dangerous trade against this indicator.