RSI Indicator Divergence Trade Setups

Silver Divergence is one of the trade setups used by traders. It involves looking at a chart & one more indicator. For our example we shall use the RSI indicator.

To spot this divergence setup find two chart points at which price makes a new swing high or a new swing low but the RSI indicator doesn't, indicating a divergence between price and momentum.

RSI Divergence Example:

In the chart below we spot two chart points, point A and point B (swing highs)

Then using RSI indicator we check the highs made by the silver trading RSI indicator, these are highs that are directly below the silver Chart points A and B.

We then draw one line on the chart and another line on the RSI indicator.

RSI Divergence Silver Setup - Divergence Silver using RSI Indicator

How to spot silver trading divergence

In order to spot this divergence setup we look for the following:

HH=Higher High- two highs but the last one is higher

LH= Lower High- 2 highs but the last one is lower

HL=Higher Low- two lows but the last one is higher

LL= Lower Low- 2 lows but the last one is lower

First let us look at the illustrations of these silver trading terms

Divergence Silver Terms Definition

Divergence Silver Terms Definition Examples

There are 2 different types of divergence setups:

1. Classic Silver Divergence
2. Hidden Divergence