Trading using RSI divergence technique?

Question

Christopher · Accepted Answer

First understand how RSI is calculated. Because it is very essential. It is a momentum indicator , which calculates the strength of the trend.Relative Strength Index DefinitionThe Relative Strength Index (RSI) is one of the most popular indicators in the market.The RSI is a basic measure of how well a stock is performing against itself by comparing the strength of the up days versus the down days. This number is computed and has a range between 0 and 100. A reading above 70 is considered bullish, while a reading below 30 is an indication of bearishness.The RSI was developed by J.Welles Wilder and detailed in his book New Concepts in Technical Trading Systems in June of 1978. For all you hardcore technicians, below is the relative strength index formula example.The default setting for the RSI is 14 days, so you would calculate the relative strength index formula as follows:Relative Strength = 1.25 (Avg. Gain over last 13 bars) +. 25 (Current Gain) / (.75 (Avg. Loss over last 13 bars) + 0 (Current Loss))Relative Strength = 1.50 / .75 = 2RSI = 100 – [100/(1+2)] = 66.67So, WHAT HAPPENS IN DIVERGENCE even though price forms lower low according to rsi calculation which is based on up days and down days, it starts making higher l low, then it acts as a leading indicator and it gives way to position yourself in buy or sell position. That is the idea of divergence.For any tool if you understand how it is constructed, its use will have meaning and you can use it properly. From now onwards all of you try to understand the concept and how the tool is constructed then everything will have meaning.

Albert · Answer

Everybody has different strategy to use RSI on technical chart, some people buy when RSI goes to 30 that is over sold zone and some sell when it goes to 70 over bought zone. I personally use 60–40 when it goes near 60 i buy for swing trade and sell . I am planning to make video on it and upload on my telgrm channel soon , flw me there to get updated , Green Leaf Traders & Advisors cheers for future trading go with trend.

Harvey · Answer

Trading RSI divergences are a few of the most profitable strategies. I do it manually, don't see any scanner for the same. I am on the verge of creating an RSI divergence scanner myself.

Trading using RSI divergence technique?

6 Answer

6 Answer

Trading using RSI divergence technique?

6 Answer

6 Answer

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