What is RSI Stocks Trading Divergence?
RSI Stocks Trading Divergence Stocks is one of the stocks strategy used by online stock traders to analyze stocks chart price movement. RSI Stocks Trading Divergence involves looking at a stocks chart and one more stock technical indicator - RSI indicator. For our this stocks divergence tutorials we shall use the RSI indicator - RSI Stocks Trading Divergence.
To spot this RSI stock trading divergence trading set up find two chart points at which stocks price makes a new swing high or a new swing low but the RSI technical indicator doesn't do the same, thus indicating that there's a divergence between the stocks price & momentum.
RSI Stocks Divergence Example:
In the stock chart below we spot two 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 technical indicator, these are the highs which are directly below the Chart points marked A & B.
We then draw one line on the stock chart & another line on the RSI indicator.
RSI Stocks Divergence Explanation - RSI Stocks Divergence Explained - RSI Divergence Stocks Strategy PDF - RSI Divergence PDF
How to trade RSI stocks trading divergence
In order to trade RSI stock divergence setup we look for the following setups:
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 stock trading divergence trading terms
What's RSI Stocks Divergence? - Stocks Trading RSI Divergence Meaning - Stocks RSI Divergence Explained
RSI Stocks Trading Divergence Meaning - RSI Divergence Stocks Explained - RSI Stocks Divergence Strategy PDF - RSI Divergence Stocks PDF
There are two different types of stocks RSI divergence setups:
- RSI Classic Divergence
- RSI Hidden Divergence
