RSI Commodity Classic Bullish Divergence and Commodity Trading Classic Bearish Divergence Trading Setups

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

• Classic divergence is a low risk method to sell near the top or buy near the bottom of a commodity market trend, this makes the risk on your commodities trades are very small relative to the potential reward.

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

There are 2 different types of RSI Classic divergence trading setups:

1. Commodity Trading Classic Bullish Divergence Setup
2. Commodity Trading Classic Bearish Divergence Setup

Classic Commodity Trading Bullish Divergence

Classic commodity bullish divergence occurs when commodities price is forming lower lows ( LL ), but oscillator is forming higher lows (HL).

Classic Commodity Trading Bullish Divergence - RSI Commodity Trading Strategies Methods

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

Classic Commodity Trading bearish divergence

Classic commodity bearish divergence occurs when commodities price is showing a higher high ( HH ), but oscillator is lower high (LH).

Commodity Trading Classic Bearish Divergence Commodities with RSI Indicator Trading Strategies Methods

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