RSI Divergence Technical Indicator Technical Analysis
Divergence has two setups and these are bullish and bearish divergence setups. For each of these setups there is also classic divergence & hidden divergence, these set-ups are shown below.
RSI is one of the often used divergence technical indicator. This indicator is an oscillator similar to the RSI & it can be used to trade divergence set-ups just the same way as RSI.
RSI Divergence Example
RSI Divergence Example
RSI Divergence Technical Indicator
Classic RSI Bullish Divergence Trading Setup
RSI classic bullish divergence forms when price is making/forming lower lows ( LL ), but RSI is forming/making higher lows (HL).
Gold Classic Bullish Divergence - RSI Divergence Examples
RSI classic bullish divergence trade setup warns of a possible change in the trend from downwards to upward. This is because though the price went lower the volume of the sellers who pushed the price lower was less like displayed and illustrated & shown by the RSI indicator. This reflects underlying weakness of the downwards trend.
Hidden RSI Bullish Divergence Trading Setup
Forms when price is making/forming higher low ( HL ), but RSI is forming/making lower low (LL).
RSI hidden bullish divergence trade setup occurs when there's a price retracement in an upwards trend.
Gold Hidden Bullish Divergence - RSI Divergence Examples
This divergence setup example setup confirms that a retracement move is complete/exhausted. This RSI divergence trade setup indicates the under-lying momentum of an upwards trend.
RSI Divergence Technical Indicator
Hidden RSI Bearish Divergence Trade Setup
Occurs when the price is making lower high ( LH ), but indicator is showing a higher high ( HH ).
Hidden bearish divergence set-up forms when there is a retracement in a downward trend.
Gold Hidden Bearish Divergence - RSI Divergence Examples
This divergence setup example setup confirms that a retracement move is complete/exhausted. This divergence shows underlying momentum of a downward trend.
RSI Classic bearish Divergence Trading Setup
RSI classic bearish divergence trade setup occurs when price is showing higher high ( HH ), but the RSI is making/forming lower high (LH).
Gold Classic Bearish Divergence - RSI Divergence Examples
RSI Classic bearish divergence setup warns of a possible change in trend from upwards to downward. This is because though the market price went higher the volume of the buyers who pushed the price higher was less just as is displayed and illustrated by the RSI technical indicator. This reflects underlying weakness of the upwards trend.
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