Commodity Trading Divergence Example

Divergence trading has two setups and these are bullish and bearish divergence set-ups. For each of these commodity setups there is also classic divergence and hidden divergence, these commodity setups are explained below.

RSI indicator is one of the oftenly used divergence technical indicator. This commodity indicator is an oscillator similar to the RSI & it can be used to trade divergence setups just the same way as the RSI indicator.

RSI Commodity Trading Divergence Example

RSI Commodities Technical Indicator Divergence Example

RSI Bullish Divergence Example

Classic RSI Bullish Commodities Trading Divergence Setup

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

Commodity Trading Classic Bullish Divergence - RSI Commodity Trading Divergence Example

RSI classic bullish divergence setup warns of a possible change in the commodity trend from down to up. This is because even though the commodities trading price went lower the volume of sellers who pushed the commodities price lower was less as shown by the RSI technical technical indicator. This indicates underlying weakness of the downwards trading trend.

Hidden RSI Bullish Commodity Trading Divergence Setup

Forms when commodities price is forming a higher low ( HL ), but the RSI indicator is making a lower low (LL).

RSI hidden bullish divergence occurs when there is a retracement in an upwards commodities trend.

Commodity Hidden Bullish Divergence - RSI Commodity Trading Divergence Example

This divergence example set-up confirms that a retracement move is complete. This RSI divergence setup indicates underlying strength of an upward commodities trend.

RSI Bearish Divergence Example

Hidden RSI Bearish Commodities Trading Divergence Setup

Forms when commodities price is forming a lower high ( LH ), but the oscillator indicator is showing a higher high (HH).

Hidden bearish divergence set-up forms when there's a retracement in a downward commodities trend.

Commodity Trading Hidden Bearish Divergence - RSI Commodity Trading Divergence Example

This divergence example set-up confirms that a retracement move is complete. This divergence indicates underlying strength of a downwards commodities trend.

RSI Classic bearish Commodity Trading Divergence Setup

RSI classic bearish divergence occurs when commodities price is showing a higher high ( HH ), but the RSI indicator is forming lower high (LH).

Commodity Classic Bearish Divergence - RSI Commodity Trading Divergence Example

RSI Classic bearish divergence warns of a possible change in commodity trend from up to down. This is because even though the commodities trading price went higher the volume of buyers who pushed the commodities price higher was less as shown by the RSI technical technical indicator. This indicates underlying weakness of the upwards trading trend.