Trade Forex Trading

RSI Classic Bullish Divergence & Classic Bearish Divergence Trade Setups

Forex classic divergence pattern is used by the FX traders as a possible sign for a trend reversal. Classic divergence trade setup is used when looking for an area where forex price could reverse and begin and start going in the opposite trend direction. For this reason forex classic divergence setup is used as a low risk entry method and also as an accurate way to exit of a trade transaction.

  • Classic divergence is a low risk method to open a sell near the top or buy near the bottom of a trend, this makes the risk on your trade transactions are small in relation to potential reward.

  • Classic divergence setup is used to predict the optimum ideal point/level at which to exit a trade transaction

There are 2 types of RSI Classic divergence setups:

  1. Classic Bullish Divergence Trading Setup
  2. Classic Bearish Divergence Trade Setup

Classic Forex Bullish Divergence

Classic forex bullish divergence occurs when price is making/forming lower lows (LL), but the oscillator trading is forming/making higher lows ( HL ).

Classic Forex Bullish Divergence - RSI Classic Bullish Divergence & RSI Classic Bearish Divergence

Classic Forex Bullish Divergence - RSI Strategies

Classic bullish forex divergence warns of a possible change in the market trend from downward to upward. This is because even though price moved lower the volume of sellers which moved price lower was less just as illustrated/shown by RSI indicator. This reflects underlying weakness of the downward forex trend.

Classic Forex bearish divergence

Classic forex bearish divergence occurs when price is making/forming a higher high (HH), but the oscillator indicator is lower high ( LH ).

Classic Bearish Divergence Trade with RSI - Classic Bullish Divergence vs Bearish Divergence RSI Trading

Classic Bearish Divergence Trade with RSI Strategies

Classic forex bearish divergence warns of a possible change in the trend from upward to downward. This is because even though price moved higher the volume of buyers that moved price higher was less just as illustrated/shown by RSI indicator. This shows underlying weakness of the upwards trend.

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