What's RSI Crude Oil Trading Divergence?
RSI Divergence Oil Trading is one of the oil trading strategy used by online crude oil traders to analyze oil chart crude oil price movement. RSI Oil Trading Divergence involves looking at a oil chart and one more crude oil technical indicator - RSI indicator. For our this crude oil trading divergence tutorials we shall use the RSI indicator - RSI Crude Oil Trading Divergence.
To spot this RSI oil divergence trading setup find two oil chart points at which crude oil price makes a new swing high or a new swing low but the RSI technical indicator does not do the same, thus indicating that there's a divergence between the crude oil price & momentum.
RSI Oil Divergence Example:
In the oil chart below we identify two crude oil chart points, chart point Marked A and chart point Marked B (swing highs)
Then using RSI technical indicator we check the highs made by the RSI oil trading technical indicator, these are highs which are directly below the Chart points marked A & B.
We then draw one line on the oil chart & another line on the RSI indicator.
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How to trade RSI oil divergence
In order to trade RSI oil divergence setup we look for the following set-ups:
HH - Higher High - 2 highs but the last one is higher
LH - Lower High - 2 highs but the last one is lower
HL - Higher Low - 2 lows but the last one is higher
LL - Lower Low - 2 lows but the last one is lower
First let us look at the example of these oil trading divergence terms
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There are two different types of oil trading RSI divergence setups:
- RSI Classic Divergence
- RSI Hidden Divergence
