RSI Forex Reverse Bullish Divergence and Reverse Bearish Divergence Trading Setups

Forex reverse divergence is used as a possible sign for a forex trend reversal. Reverse forex divergence trading setup is used when looking for an area where forex price could reverse and start moving in the opposite direction. For this reason forex reverse divergence is used as a low risk entry method and also as an accurate way of exit out of a forex trade.

• Reverse forex 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.

• Reverse forex divergence is used to predict the optimum point at which to exit a FX trade

There are two types of RSI Reverse forex divergence trading setups:

1. Reverse Bullish Divergence Forex Trading Setup
2. Reverse Bearish Divergence Forex Trading Setup

Reverse Forex Bullish Divergence

Reverse forex bullish divergence occurs when price is making lower lows (LL), but the RSI indicator is making higher lows (HL).

Reverse Forex Bullish Divergence - What is RSI Reverse Divergence?

Reverse RSI bullish forex divergence warns of a possible reversal 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 forex prices lower was less as indicated by the RSI indicator. This signals underlying weakness of the downward forex trend.

Reverse Forex bearish divergence

Reverse RSI forex bearish divergence occurs when price is making a higher high (HH), but the RSI indicator is lower high (LH).

Reverse Bearish Divergence Trading - What is RSI Reverse Forex Divergence? - RSI Reverse Bullish Divergence and RSI Reverse Bearish Divergence

RSI reverse forex bearish divergence warns of a possible reversal in the forex trend from up to down. This is because even though the forex price went higher the volume of buyers that pushed the forex price higher was less as indicated by the RSI indicator. This signals underlying weakness of the upwards trend.