RSI Divergence Explained
RSI Gold Trading Divergence is one of the gold trading strategy used by online xauusd traders to analyze gold chart price movement. RSI XAUUSD Divergence involves looking at a xauusd chart & one more xauusd indicator - RSI indicator. For our this xauusd trading divergence tutorials we shall use the RSI indicator - RSI XAUUSD Divergence.
To spot this RSI gold divergence trading set up find two chart points at which xauusd 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 is a divergence between the xauusd price and momentum.
RSI Gold Trading Divergence Example:
In the gold chart below we identify 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 that are direct below the Chart points marked A and B.
We then draw one line on the gold chart & another line on the RSI xauusd trading technical indicator.
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How to trade RSI gold divergence
In order to trade RSI gold divergence set-up we look for the following setups:
HH - Higher High - two highs but the last one is higher
LH - Lower High - two highs but the last one is lower
HL - Higher Low - two lows but the last one is higher
LL - Lower Low - two lows but the last one is lower
First let us look at the examples of these gold divergence trading terms
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There are two different types of gold trading RSI divergence setups:
- RSI Classic Divergence
- RSI Hidden Divergence
