What's RSI Indices Trading Divergence?
RSI Divergence Indices Trading is one of the indices trading strategy used by online stock indices traders to analyze indices chart stock indices price movement. RSI Indices Divergence involves looking at a stock indices chart & one more stock indices technical indicator - RSI indicator. For our this stock indices trading divergence tutorials we shall use the RSI indicator - RSI Indices Trading Divergence.
To spot this RSI Indices Trading Divergence setup find 2 chart points at which stock indices price makes a new swing high or a new swing low but the RSI indicator does not do the same, thus indicating that there is a divergence between the stock indices price and momentum.
RSI Indices Trading Divergence Example:
In the stock indices chart below we spot two chart points, chart point A and chart point B ( swing highs )
Then using RSI indicator we check highs made by RSI technical indicator, these are highs which are directly below the Chart points marked A and B.
We then draw one line on the stock indices chart & another line on the RSI indicator.
RSI Indices Divergence Explanation - Indices Bullish Divergence RSI - Indices Bearish Divergence RSI - How Accurate is RSI Divergence Indices Trading
How to trade RSI Indices Trading Divergence
In order to trade RSI Indices Divergence setup we look for the following setups:
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 - 2 lows but the last one is higher
LL - Lower Low - two lows but the last one is lower
First let us look at examples of these Indices Trading Divergence trading terms
RSI Divergence Definition - Indices RSI Divergence Explained
RSI Indices Trading Divergence Definition - RSI Divergence Indices Trading Explained - RSI Indices Divergence Strategy Tutorial - RSI Divergence Indices Trading PDF
There are two types of indices trading RSI divergence setups:
- RSI Classic Divergence
- RSI Hidden Divergence
