Trade Divergence Example - RSI Divergence Indicator Analysis
Divergence has two setups and these are bullish & bearish divergence setups. For each of these setups there's also classic divergence and hidden divergence, these set-ups are explained below.
RSI is one of the oftenly used divergence technical indicator. This technical technical indicator is an oscillator indicator similar to the RSI & it can be used to trade divergence just the same way as the RSI.
RSI Divergence Example
RSI Divergence Example
RSI Bullish Divergence Example - RSI Divergence Indicator
Classic RSI Bullish Forex Trade Divergence Trading Setup
RSI classic bullish divergence forms when the price is forming/making lower lows (LL), but RSI is forming/making higher lows ( HL ).
Classic Bullish Divergence - RSI Divergence Example
RSI classic bullish divergence setup warns of a possible change in the trend from downward to upward. This is because even though the price headed lower the volume of the sellers that pushed the price lower was less like illustrated by RSI indicator. This is an indicator of the underlying weakness of the downwards trend.
Hidden RSI Bullish Trade Divergence
Forms when the price is forming/making a higher low ( HL ), but the RSI is showing a lower low ( LL ).
RSI hidden bullish divergence trade setup forms when there's a retracement in an uptrend.
Hidden Bullish Divergence - RSI Divergence Example
This divergence setup example setup confirms that a price retracement move is complete. This RSI divergence reflects underlying momentum of an uptrend.
RSI Bearish Divergence Example - RSI Divergence Indicator
Hidden RSI Bearish Forex Trade Divergence Trading Setup
Forms when price is making/forming a lower high (LH), but oscillator technical indicator is making/forming a higher high ( HH ).
Hidden bearish divergence forms when there is a retracement in a downtrend.
Hidden Bearish Divergence - RSI Divergence Example
This divergence example setup confirms that a price retracement move is exhausted. This divergence shows underlying momentum of a downtrend.
RSI Classic bearish Trade Divergence
RSI classic bearish divergence occurs when price is forming a higher high (HH), but RSI is making lower high ( LH ).
Classic Bearish Divergence - RSI Divergence Example
RSI Classic bearish divergence signals a possible reversal in forex trend from upward to downward. This is because even though the price headed higher the volume of the buyers that pushed the price higher was less like as illustrated/shown by RSI indicator. This is an indicator of the underlying weakness of the upwards trend.
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