Let’s find out What is RSI divergence through the article on Forex Trading. In the reading below we will provide you with complete information about RSI divergence. The RSI indicator is widely used with divergence to give buy and sell signals. This method offers simplicity and visibility, making it easy for traders to identify market entry and exit points. With its flexibility and high efficiency, RSI divergence becomes an important tool in evaluating trends and entry points in trading.
What is RSI divergence?
RSI Divergence When the RSI and price lines move in opposition to each other. By observing the in-phase movement of RSI compared to the price line. From there, we will easily recognize this RSI divergence. These points are often signs of price reversal or continuation. Besides, it also shows that the phenomenon creates opportunities to bring attractive profits to investors.
There are two types of RSI divergence: normal divergence RSI and hidden divergence RSI.

RSI diverges often
RSI divergence is often a reversal of the old trend. It can be called negative divergence and positive divergence. RSI Negative-Positive Divergence is considered an advanced usage. The weakening of the main trend has been since this phenomenon occurred. Warning of the weakening of the main trend, we need to find other confirming signals before conducting counter-trend trades.
Hidden RSI divergence
Hidden divergences often predict a continuation of the old trend. This signal is quite rare and more reliable than normal divergence. Trading based on hidden divergence is essentially trend trading. To trade more effectively, investors need to confirm hidden divergence signals with other tools.
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In-depth RSI divergence trading guide
Based on the 2 types of divergence above, we can divide divergence trading into 2 smaller cases. Besides, it is also necessary to pay attention to issues surrounding in-depth RSI. Including RSI indicator, RSI and MFI indicator,…
Below are the following cases: bullish price in divergence and bearish price in divergence.
Price increase in What is RSI divergence?
It occurs when the price of the asset increases while the RSI shows only overbought levels. This usually happens when stock prices or the stock market are on the rise. But its indicator signals overbought levels, suggesting that a correction or reversal could be imminent.
RSI divergence is usually bullish
When the price drops and creates subsequent bottoms that are lower than the previous bottom. Reversing it will create subsequent bottoms that are higher than the previous bottoms.
Investors often wait for confirmation from volume to determine trend reversal. Besides, it is possible to apply other indicators to enter orders safely.


RSI hidden bullish divergence
While the bottoms of the RSI are decreasing, the price is gradually increasing. A bullish hidden divergence signal, usually indicates that the price is likely to continue rising in the trend after the signal appears.


Discount in What is RSI divergence?
This is when the price of an asset gradually decreases while the in-depth RSI indicator simultaneously shows signs of oversold levels. Usually, this happens when the market or stock prices are falling. But it shows an oversold level, suggesting that there may be a correction or reversal.
RSI divergence is usually bearish
The peaks of the price are continuously decreasing, moving in the opposite direction to the peaks of the increasing price.
In the image below, the new lower peak is accompanied by high volume, making it possible for investors to take profits immediately.


RSI hidden bearish divergence
The price decreases and the following peaks tend to decrease, while the peaks of the divergence gradually increase.
With hidden bearish divergence, the price will continue to decrease following the trend after the indicator appears.


The problem in trading What is RSI divergence?
This question often arises when investors encounter major challenges in trading. Recognizing divergences can be a complex task, requiring a deep understanding of the market and technical situation. Therefore, it is necessary to grasp some important related information about Pivot points, advanced Pivot,.. to achieve efficiency in trading.
RSI divergence appears but not at the right time for good trading


In the image above, we illustrate that the market is approaching the dotted line. In the end, if this dotted line is immediately reduced, the market will have a normal divergence. This phenomenon warns of a possible reversal. If you continue to place an order here, the market will continue in the following direction.
After a divergence, we can suffer losses or heavy losses if we enter direct orders. Therefore, divergence always follows a large reversal potential, but it is not certain that when there is a signal, the market will immediately reverse. That is a limitation when trading divergence.
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RSI divergence appeared but the order was entered at the wrong time


RSI diverged at the wrong time
If the two situations diverge later, if you enter an order at that time, it can be considered late. Traders will have to bear negative consequences if they do not use stop loss or may be exposed to stop loss. Besides, there is also the risk of burning your account in one day if you bet without stop loss.
The most genuine market reversal situation is identified as the last one marked with a blue divergence. However, we often enter buy orders based on bullish candles and sell orders based on bearish candles.
In the case of true reversal divergence above, we will be hit with stop loss if we enter the order by waiting above the bullish candle. This case is located between two bearish candles. The body of the spinning top candlestick increases but is very small and both ends of the candlestick have very long shadows. However, it is not possible to enter orders with this candle. If the candlestick increases later, if you place an order at this time, your order will not be matched. Besides, the candle has a high stop loss depending on the large amplitude.
Thus, the market also reversed in the above case despite the divergence and eventuality. All trading orders are considered failed or cannot be placed in that case. Therefore, it is necessary to have appropriate preparation plans and good candlestick patterns to create good trading opportunities.
Conclude
Thus, the above article has compiled information to learn What is RSI divergence based on Forex Trading article. Most importantly, applying RSI in-depth requires discipline and patience to avoid fake signals and unnecessary losses.
Wishing investors continued success in applying RSI divergence and other trading methods to achieve the best results in the market.
FAQs
What are the criteria to enter a buy order with RSI 6 divergence?
There are 3 standards. First is the appearance of divergence. The second is to set up a trade with basic candlestick patterns. Third, you should trade closed divergences.
RSI is classified into what group?
RSI classification depends on the momentum indicator group. The group measures the speed intensity and price fluctuations. Momentum is called bullish or bearish intensity.
Revealing some tips when trading with RSI divergence?
We can apply the following tips: First, the RSI indicator needs to move close to the overbought or oversold area. Second, wait until the tops or bottoms have formed. Third, divergence will be more accurate if we use a long time frame instead of using a short time frame to avoid noise.