RSI Commodities Trading Indicator Divergence Commodity Trading Setups
Commodity Trading Divergence is one of the trade setups used by Commodities traders. It involves looking at a commodity chart and one more commodity technical indicator. For our example we shall use the RSI commodity indicator.
To spot this commodity divergence trading setup find two commodity chart points at which commodities price makes a new swing high or a new swing low but the RSI commodity indicator does not, indicating a divergence between commodities price and momentum.
RSI Commodity Trading Divergence Example:
In the commodities chart below we identify two commodity chart points, point A and point B (swing highs)
Then using RSI commodity indicator we check the highs made by the commodity RSI indicator, these are the highs that are directly below the commodity Chart points A and B.
We then draw one line on the commodities chart and another line on the RSI commodity indicator.
RSI Divergence Commodity Trading Setup - Commodity Trading Divergence Commodities using RSI Commodity Trading Indicator
How to spot commodity divergence
In order to spot this commodity divergence setup we look for the following:
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 illustrations of these commodity terms
Divergence Commodities Terms Definition
Commodity Trading Divergence Commodities Terms Definition Examples
There are two different types of commodity divergence setups:
- Classic Divergence
- Hidden Divergence
