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