๐ Divergence strategy on the Relative Strength Index (RSI)
This strategy relies on comparing price movement with the RSI indicator to determine whether the trend will continue or reverse.
1๏ธโฃ Firstly: Regular Divergence โ Trend reversal
Used at the end of the trend
โ Bullish divergence (Buy opportunity):
Price makes a lower low
RSI makes a higher low โก๏ธ This means selling momentum is weakening
โก๏ธ Potential price reversal upwards
Entry: After confirming a reversal candle
Stop loss: Below the last low
Target: Nearest resistance
2๏ธโฃ Secondly: Hidden Divergence โ Continuation of the trend
Used during correction within the trend
โ Hidden bullish divergence:
Price makes a higher low
RSI makes a lower low โก๏ธ This means the bullish trend is strong
โก๏ธ Continuation of the rise after correction
Entry: Upon breaking a small peak or confirmation candle
Stop loss: Below the last low
Target: New highs with the trend
Best timeframes for use
โ 15-minute โ 30-minute โ Hourly timeframe
โ Stronger results when:
With a clear trend
And near support or resistance
Important notes
Don't rely on RSI alone
Must have price confirmation (candle / support and resistance)
Avoid going against the overall trend
In the end
Divergence = Smart reading of the strength or weakness of the trend
Regular โ Reversal
Hidden โ Continuation
Save the strategy and review it before any entry
#forex
#crypto #goldtrading #forex_uae #forex_kuwait #ูุฑูุจุชูุฌ
