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What Is RSI Divergence | Types Of Divergence | MT4 Indicator
We’ll talk about divergence What Is RSI Divergence | Types Of Divergence | MT4 Indicator How RSI Divergence Work, etc.
We have already discussed RSI in detail in another article. Now we have added divergence with RSI.
RSI divergence can be called a technical indicator or tool. Which allows us to estimate the advance movement of a stock.
So Stay tuned, as this kind of technical analysis will improve your trading system.
What Is RSI Divergence
As I said RSI divergence is a technical tool. Occasionally there are some stocks that make higher.
Suppose SBIN Share is hovering around its maximum price of Rs 300. A few days later it was seen that the stock touched 320. This means that SBI shares created a new high.
It was seen again a few days later that SBI reached 320 to 350. And made a new High again.
In the stock market, it is called Higher – High.
And we added RSI Indicator with SBI Candle Chat.
Normally RSI movements keep pace with the movement of stocks. But when this rhythm falls, the movement of the stock is likely to change.
Suppose when SBI reached 300 to 320, Rsi reached 45 to 57. (as an example)
Again when SBI reached 320 to 350, Rsi reached 57 to 75.
Again SBI reached 350 to 370 and set a new high price record. That is, he made higher – high.
But then Rsi fell from 75 to 60. Rsi made Higher to Low.
In this case, you will see the difference. The share price is increase but the RSI level has decreased.
This means that the RSI indicator is acting as a reverse of that stock at the moment.
This is called divergence. (Bearish DIVERGENCE)
Advatages of RSI Divergence
- By using divergence in this way, we can predict the movement of any stock.
- And this way we can invest in stocks using divergence.
- You can draw manually through the trend line.
- Or you can find the RSI divergence indicator in some technical charts like Zerodha. And will automatically show you when and where divergence has been created.
si Divergence Types
- Bullish Divergence
- Bearish Divergence
Bearish Divergence
Above I have explained Bearish Divergence.
When a stock’s price making higher- high, but RSI is making higher to lower than we call it Bearish Divergence.
Bullish Divergence
Again when a stock’s price making a lower low. Means as an example SBI fall from 350 to 330 & RSI also decreased 60 to 45 level, that makes 1st lower-low RSI. Actually same time stock’s price & RSI both making lower -low.
then again fall 330 to 310 & RSI again decreased 45 to 31 level. That makes 2st lower-low.
Now again SBI falls from 310 to 295, But the RSI level increased 45 to 50 level.
That’s time stock’s price makes lower-low But RSI makes low to high.
We will call it Bullish Divergence or Positive Divergence
Because it is a Stock trend bullish reversal Pattern, SBI will move 295 to the upside.
Important Rules of Use of RSI Divergence.
How To Trade Rsi Divergence
- RSI DIVERGENCE does not work well in intraday trading.
- RSI DIVERGENCE works well in swing trading and positional trading.
- If you want to short sell using Bearish Rsi Divergence Trading Strategy then check above any resistance available or not. And secondly, if that stock breaks below the 50-day moving average, then your golden opportunity is to short-sell that stock.
- One day or one-hour time frames can be used for Analysis. Use Rsi Divergence Indicator
RSI Divergence Screener NSE
Top Stock Research screener helps you to find out RSI Divergence pattern Stock
Click & Get – Bullish Divergence by RSI on Daily Tick
Click & Get – Bearish Divergence by RSI on Daily Tick
Read – How to Use Top Stock Research Screener
Another screener is chartink.com. Just Add filter for RSI Divergence & Run. Rsi Divergence Chartink.
Read – How to Use Chartink Screener
Rsi Divergence Mt4 is Advance Indicator, we will discuss its another article.
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Last Word
I hope you like my article “What Is RSI Divergence | Types Of Divergence | MT4 Indicator” your knowledge has increased a lot. If I have made a mistake in this article or if you have any questions, feel free to leave a comment in the comments box and I will try to answer your question as soon as possible.