RSI CFD Indicator Divergence CFD Setups
CFD Trading Divergence is one of the trade setups used by CFD traders. It involves looking at a cfd chart & one more cfd technical indicator. For our example we shall use the RSI indicator.
To spot this cfd divergence setup find 2 chart points at which cfd price makes a new swing high or a new swing low but the RSI indicator doesn't, indicating a divergence between cfd price & momentum.
RSI CFD Trading Divergence Example:
In the cfds chart below we identify two chart points, point A and point B (swing highs)
Then using RSI indicator we check the highs made by the cfd RSI technical indicator, these are the highs that are directly below the cfd Chart points A & B.
We then draw one line on the cfds chart and another line on the RSI indicator.
RSI Divergence CFD Setup - CFD Trading Divergence CFD using RSI Technical Indicator
How to spot cfd divergence
In order to spot this cfd divergence setup we look for the following:
HH=Higher High- two highs but the last one is higher
LH= Lower High- 2 highs but the last one is lower
HL=Higher Low- two lows but the last one is higher
LL= Lower Low- 2 lows but the last one is lower
First let us look at the illustrations of these cfd terms
Divergence CFD Terms Definition
CFD Trading Divergence CFD Terms Definition Examples
There are two types of cfd divergence setups:
- Classic CFDs Trading Divergence
- Hidden CFD Trading Divergence
