RSI Divergence Indicator Technical Analysis
Divergence has two setups and these are bullish & bearish divergence set-ups. For each of these setups there is also classic divergence & hidden divergence, these setups are explained below.
RSI indicator is one of the oftenly used divergence indicator. This indicator is an oscillator similar to the RSI & it can be used to trade divergence setups just the same way as the RSI.
RSI Divergence Example
RSI Indicator Divergence Example
RSI Divergence Indicator
Classic RSI Bullish Divergence Trading Setup
RSI classic bullish divergence forms when price is forming lower lows ( LL ), but RSI indicator is making higher lows (HL).
Gold Classic Bullish Divergence - RSI Divergence Examples
RSI classic bullish divergence setup warns of a possible change in the trend from downwards to upwards. This is because though the market price went lower the volume of the sellers who pushed the price lower was less as shown by the RSI indicator. This indicates underlying weakness of the down-wards trend.
Hidden RSI Bullish Divergence Trading Setup
Forms when price is forming higher low ( HL ), but RSI indicator is making lower low (LL).
RSI hidden bullish divergence setup occurs when there a price retracement in an upward trend.
Gold Hidden Bullish Divergence - RSI Divergence Examples
This divergence example setup confirms that a market retracement move is complete. This RSI divergence setup indicates the underlying strength of an upwards trend.
RSI Divergence Indicator
Hidden RSI Bearish Divergence Trading Setup
Occurs when the price is making lower high ( LH ), but indicator is showing a higher high ( HH ).
Hidden bearish divergence set-up forms when there is a retracement in a downwards trend.
Gold Hidden Bearish Divergence - RSI Divergence Examples
This divergence example setup confirms that a market retracement move is complete. This divergence indicates underlying strength of a downwards trend.
RSI Classic bearish Divergence Setup
RSI classic bearish divergence setup occurs when price is showing higher high ( HH ), but the RSI indicator is forming lower high (LH).
Gold Classic Bearish Divergence - RSI Divergence Examples
RSI Classic bearish divergence setup warns of a possible change in trend from upwards to downwards. This is because though the market price went higher the volume of the buyers who pushed the price higher was less as shown by the RSI technical indicator. This indicates underlying weakness of the up-wards trend.
