RSI CFD Trading Indicator Divergence CFD Setups

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

To spot this divergence trading setup find two cfd 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 CFD Trading Divergence Example:

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

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

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

RSI Divergence CFD Setup - CFD Trading Divergence CFD using RSI Indicator

How to spot cfd 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 cfd terms

Divergence CFD Terms Definition

CFD Trading Divergence CFD Terms Definition Examples

There are 2 types of cfd divergence setups:

1. Classic CFD Trading Divergence
2. Hidden CFDs Trading Divergence