RSI CFD Classic Bullish Divergence and CFD Classic Bearish Divergence CFD Setups

CFD Trading classic divergence pattern is used as a possible sign for a trend reversal. Classic divergence setup is used when looking for an area where cfds price could reverse and start going in the opposite market direction. For this reason cfd trading classic divergence is used as a low risk entry method and also as an accurate way of exit out of a cfds trade transaction.

• Classic 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 cfds trades are very small relative to the potential reward.

• Classic divergence is used to predict the optimum point at which to exit a cfd trading trade

There are 2 types of RSI Classic divergence trading setups:

1. CFD Classic Bullish Divergence Setup
2. CFD Classic Bearish Divergence Setup

Classic CFDs Trading Bullish Divergence

Classic cfd bullish divergence occurs when cfds price is forming lower lows (LL), but the oscillator technical indicator is making higher lows ( HL ).

Classic CFD Trading Bullish Divergence - RSI CFD Strategies

Classic bullish divergence warns of a possible change in the market trend from down to up. This is because even though the cfds price went lower the volume of sellers who pushed the cfds price lower was less as illustrated by the RSI indicator. This demonstrates underlying weakness of the downward trend.

Classic CFD Trade bearish divergence

Classic cfd bearish divergence occurs when cfds price is forming a higher high (HH), but the oscillator technical indicator is lower high ( LH ).

CFD Classic Bearish Divergence CFD with RSI CFD Indicator Methods

Classic cfd bearish divergence warns of a possible change in the trend from up to down. This is because even though the cfds price went higher the volume of buyers who pushed the cfds price higher was less as illustrated by the RSI indicator. This indicates underlying weakness of the upward trend.