RSI Gold Classic Bullish Divergence and Trade Classic Bearish Divergence Trade Setups
Gold classic divergence pattern is used as a possible sign for a trend reversal. Classic trading divergence setup is used when looking for an area where price could reverse and start going in the opposite direction. For this reason classic divergence is used as a low risk entry method and also as an accurate way of exit out of a trade.
- Classic trading divergence is a low risk method to sell near the top or buy near the bottom of a market trend, this makes the risk on your trade transactions are small relative to potential reward.
- Classic trading divergence is used to predict the optimum point at which to exit a trade
There are two different types of RSI Classic divergence setups:
- Gold Classic Bullish Divergence Setup
- Gold Classic Bearish Divergence Setup
Classic Bullish Divergence
Classic gold trading bullish divergence occurs when price is forming lower lows ( LL ), but oscillator is forming higher lows (HL).
Classic Bullish Divergence - RSI Gold Strategies
Classic bullish trading divergence warns of a possible change in the market trend from downwards to upwards. This is because though the price moved lower the volume of sellers that moved the price lower was less as illustrated by the RSI. This shows underlying weakness of the down ward trend.
Classic bearish divergence
Classic gold trading bearish divergence occurs when price is showing a higher high ( HH ), but oscillator is lower high (LH).
Trade Classic Bearish Divergence with RSI Indicator Strategies Methods
Classic gold trading bearish divergence warns of a possible change in the trend from upwards to downwards. This is because though the price moved higher the volume of buyers that moved the price higher was less as illustrated by the RSI. This shows underlying weakness of the upwards trend.
