RSI Forex Classic Bullish Divergence & Classic Bearish Divergence Trading Setups
Forex classic divergence is used as a possible sign for a forex trend reversal. Classic divergence trading setup is used when looking for an area where forex price could reverse and start going in the opposite direction. For this reason forex classic divergence is used as a low risk entry method and also as an accurate way of exit out of a forex trade.
- Classic divergence is a low risk method to sell near the top or buy near the bottom of a forex market trend, this makes the risk on your forex trades are very small relative to the potential reward.
- Classic divergence is used to predict the optimum point at which to exit a FX trade
There are two types of RSI Classic divergence trading setups:
- Classic Bullish Divergence Setup
- Classic Bearish Divergence Setup
Classic Forex Bullish Divergence
Classic forex bullish divergence occurs when price is making lower lows (LL), but the oscillator technical technical indicator is making higher lows ( HL ).
Classic Forex Bullish Divergence - RSI Forex Trading Strategies
Classic bullish forex divergence warns of a possible change in the forex market trend from down to up. This is because even though the forex price went lower the volume of sellers who pushed the price lower was less as illustrated by the RSI indicator. This indicates underlying weakness of the downward forex trend.
Classic Forex bearish divergence
Classic forex bearish divergence occurs when price is making a higher high (HH), but the oscillator technical technical indicator is lower high ( LH ).
Classic Bearish Divergence Trading with RSI Indicator Forex Strategies
Classic forex bearish divergence warns of a possible change in the forex trend from up to down. This is because even though the price went higher the volume of buyers that pushed the price higher was less as illustrated by the RSI indicator. This indicates underlying weakness of the upwards trend.
