📊 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.
1️⃣ First: Regular Divergence – trend reversal
Used at the end of the trend
✅ Bullish Divergence (Buying opportunity):
the price makes a lower low
RSI indicator making a higher low ➡️ This means selling momentum is weakening
➡️ Price reversal potential upwards
Entry: After confirmation of a reversal candlestick
Stop-loss: Below the last low
Target: Nearest resistance
2️⃣ Second: Hidden Divergence – Trend continuation
Used during correction within the trend
✅ Hidden bullish divergence:
Price is making a higher low
RSI indicator making a lower low ➡️ This means the upward trend is strong
➡️ Continuation of the rise after the correction
Entry: With a break of a small peak or confirmation candlestick
Stop-loss: Below the low
Target: New highs with the trend
Best timeframes to use
✔ 15-minute – 30-minute – 1-hour timeframe
✔ Stronger results when:
With a clear trend
And near support or resistance
Important notes
Don't rely on RSI alone
Price confirmation needed (candlestick / support and resistance)
Avoid entering against the overall trend
In the end
Divergence = Smart reading of trend weakness or strength
Regular ➜ Reversal
Hidden ➜ Continuation
Save the strategy and review it before any entry
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