Forex Divergence Definition - RSI Divergence Indicator Analysis
Divergence concept is a concept where a trader will for a difference between the currency price movement with the movement of a technical indicator. For our example we shall use the RSI indicator to explain divergence trading.
RSI indicator is one of the oftenly used divergence indicator. This indicator is an oscillator similar to the RSI & it can be used to trade divergence just the same way as the RSI technical indicator.
RSI Analysis & RSI Signals
RSI Trade Divergence Indicator
RSI Bullish Trade Divergence Setups - RSI FX Divergence Indicator
Classic RSI Bullish Divergence
RSI classic bullish divergence occurs when the price is forming lower lows (LL), but the RSI indicator is making higher lows ( HL ).
Classic Bullish Divergence - RSI Divergence Definition
RSI indicator classic bullish divergence setup warns of a possible change in the trend from down to up. This is because even though the market price went lower the volume of the sellers who pushed the price lower was less as illustrated by the RSI. This is an indicator of the underlying weakness of the downward trend.
Hidden RSI Bullish Divergence Trading Setup
Forms when price is making a higher low (HL), but the RSI indicator is showing a lower low ( LL ).
RSI hidden bullish divergence occurs when there a retracement in an uptrend.
Hidden Bullish Divergence - RSI Divergence Definition
This set-up confirms that a market retracement move is complete. This RSI divergence indicates underlying strength of an uptrend.
RSI Bearish Trade Divergence - RSI Trade Divergence Indicator
Hidden RSI Bearish Divergence Trading Setup
Forms when price is forming a lower high (LH), but the oscillator technical indicator is making a higher high ( HH ).
Hidden bearish divergence forms when there a retracement in a downtrend.
Hidden Bearish Divergence - RSI Divergence Definition
This set-up confirms that a market retracement move is complete. This divergence indicates the underlying strength of a downtrend.
RSI Classic bearish Divergence
RSI classic bearish divergence occurs when the price is forming a higher high (HH), but the RSI indicator is making lower high ( LH ).
Classic Bearish Divergence - RSI Divergence Definition
RSI Classic bearish divergence setup signals a possible change in trend from up to down. This is because even though the market price went higher the volume of the buyers who pushed the price higher was less as illustrated by the RSI. This is an indicator of the underlying weakness of the upward trend.
