Do you know how to read and interpret RSI Divergence correctly?
Because RSI Divergence is the most important among all types of divergence that you can find in trading.
If you don’t know how to read that or you feel that you need to learn more about it, then you are in the right place.
In fact, in the following live trade on the TradingView platform, you can easily learn how to exploit RSI Divergence!
Not only we explain how to use divergence indicators but you can also learn our complete trading strategy, which we explain step-by-step.
From a technical point of view, the setup is very simple and clear:
First of all, we have a divergence between the price and the RSI Exhaustion.
Additionally, we have the RSI bullish exhausted.
And finally, we also have a confirmed top (displayed by the Bottoms Tops Signal).
Trade setup – 15 Apr 2019
The setup is clear and simple, and all our conditions are met.
The Bottoms Tops Signal and the RSI Exhaustion are confirming another downward movement and we exploit the major support indicated by the Levels and Zones to set the take profit level.
Trade update – 16 Apr 2019
Both the price and the RSI Exhaustion are moving lower so we should expect to keep going down.
Trade update – 16 Apr 2019
The trade is running smoothly, both the price and the RSI Exhaustion keep moving lower.
Because of this, we were able to move our stop loss to breakeven, so now we are in a risk-free trade.
If the price suddenly comes back up we’ll still make money or, at least, we will not lose any money.
Trade update – 17 Apr 2019
It looks like the downward movement has decelerated and a bottom has formed.
The bottom has not any supporting technical evidence for it being a major bottom so we can ignore it.
The fact that the downward movement has decelerated is due to the fact that we’re approaching the support level (our target) which puts upward pressure on the price action.
It’s not concerning, though, because the initial technical analysis is still totally intact.
Trade closed – 18 Apr 2019
It took some time but eventually, the price went down and reached the target.
If you are learning how to make money on foreign exchange or, at least, you want to learn an easy forex strategy, you should definitely understand the power of RSI divergence.
In fact, we exploited it in this trading setup and, in the end, we made a 2.68x profit.
And once you understand how powerful trading divergence is, you will be able to take advantage of it, be it bearish divergence or bullish divergence.
What do you think about divergence?
Do you usually take advantage of it, like we typically do here?
Feel free to contribute to our knowledge and leave your feedback in the comment section of the YouTube video above.
