RSI Divergence Commodity Trading Indicator Technical Analysis

Divergence trading concept is a concept where a trader will for a difference between the commodities price movement with the movement of a technical trading indicator. For our examples we shall use the RSI indicator to explain divergence trading.

RSI indicator is one of the oftenly used divergence technical indicator. This commodity technical indicator is an oscillator similar to the RSI & it can be used to trade divergence set ups just the same way as the RSI indicator.

RSI Commodity Trading Technical Analysis and RSI Trading Signals

RSI Divergence Indicator

RSI Divergence Indicator

Classic RSI Bullish Commodity Trading Divergence Setup

RSI classic bullish divergence occurs when price is forming lower lows (LL), but RSI indicator is making higher lows (HL).

Commodity Classic Bullish Divergence - RSI Commodity Divergence Definition

RSI classic bullish divergence warns of a possible change in the commodity trend from down to up. This is because even though the commodity price went lower the volume of sellers who pushed the commodities price lower was less as illustrated by the RSI indicator. This is an technical indicator of the underlying weakness of the downwards trend.

Hidden RSI Bullish Commodities Trading Divergence Setup

Forms when price is making a higher low ( HL ), but RSI indicator is showing a lower low (LL).

RSI hidden bullish divergence occurs when there is a retracement in an upwards commodities trend.

Commodity Hidden Bullish Divergence - RSI Commodity Divergence Definition

This set-up confirms that a retracement move is complete. This RSI divergence setup indicates underlying strength of an upward commodities trend.

RSI Divergence Technical Indicator

Hidden RSI Bearish Commodities Trading Divergence Setup

Forms when price is making a lower high ( LH ), but oscillator trading indicator is showing a higher high (HH).

Hidden bearish divergence forms when there is a retracement in a downwards trend.

Commodity Hidden Bearish Divergence - RSI Commodity Divergence Definition

This set-up confirms that a retracement move is complete. This divergence indicates underlying strength of a downward commodities trend.

RSI Classic bearish Commodity Trading Divergence Setup

RSI classic bearish divergence occurs when price is forming a higher high (HH), but RSI indicator is lower high (LH).

Commodity Classic Bearish Divergence - RSI Commodity Divergence Definition

RSI Classic bearish divergence warns of a possible change in commodity trend from up to down. This is because even though the commodity price went higher the volume of buyers who pushed the commodity price higher was less as illustrated and shown by the RSI technical indicator. This is an technical indicator of the underlying weakness of the upwards trend.