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Oscillators

RSI Divergence Trading RSI divergence is fairly reliable, especially when used alongside other technical indicators for confirmation. However, like all technical tools, it's not foolproof and should be used as part of a broader strategy that includes risk management. A bullish divergence occurs when the price of a security is moving downwards along with making lower lows while the RSI indicator is making higher lows. These movements indicate an increasing bullish momentum where traders can enter a long position when the security shows signs of upward reversal. Examples of bullish RSI divergence: Example 1: Stock price falls to a new low, but RSI forms a higher low. Example 2: Forex pair decreases in value, but RSI shows increasing troughs. Example 3: Cryptocurrency drops, but RSI indicates an upward momentum shift
NSE:BANKNIFTYEducation
by SkyTradingZone
What is Rsi Indicator What Is the Relative Strength Index (RSI)? The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to detect overvalued or undervalued conditions in the price of that security. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. The indicator was developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, New Concepts in Technical Trading Systems. In addition to identifying overbought and oversold securities, the RSI can also indicate securities that may be primed for a trend reversal or a corrective pullback in price. It can signal when to buy and sell. Traditionally, an RSI reading of 70 or above indicates an overbought condition. A reading of 30 or below indicates an oversold condition.
NSE:BANKNIFTYEducation
by EmpireCrown
Advanced Divergence Trading"Welcome to SkyTradingZone " Hello Everyone 👋 Video Information - Hello , Everyone lets start the Journey of Advanced Divergence Trading In this video, we are going to look at divergence. What is divergence? Divergence is basically when the market is creating higher highs and higher lows, and the RSI is creating the opposite. (Divergence can happen in both downtrends and uptrends.) ---------------------------------------------------------------- Q What divergence does, it's basically telling you that the trend is weakening. This is in a downtrend, and the RSI, the divergence, is basically telling you that this downtrend is weakening and there could be a possible reversal soon. So normally when divergence is happening, you normally see The market creates basically a curve. ---------------------------------------------------------------- Structure is always key It doesn't matter the strategy you use, structure is always key. So what you want to see is that breaker structure to say that the trend is changing because structure changed. Note- Normal Tip From our side try to learn Liquidity and order block
NSE:BANKNIFTYEducation
by SkyTradingZone
2
Bollinger Band as a Dynamic Support/Resistance LevelThis study delves into the significance of the Upper Bollinger Band (UBB) as a resistance level in financial markets, particularly focusing on instances where an asset fails to close above the UBB and the subsequent rallies when such breakouts occur. The Upper Bollinger Band, a technical analysis tool developed by John Bollinger, is a volatility-based band that encapsulates price movement. Traders often use it to identify potential reversal points or the initiation of a new trend. Analysis:- Resistance at UBB: The UBB frequently acted as a formidable resistance level. Prices approach the UBB but fail to close above it, it suggests a strong selling pressure or a temporary halt in the bullish momentum. Breakthroughs and Rallies: Instances where prices successfully close above the UBB are marked by a shift in market sentiment. This breakthrough often triggers increased buying activity, leading to substantial rallies. The phenomenon may indicate a breakout from a consolidation phase or the initiation of a new uptrend. Confirmation Signals: Traders may use additional technical indicators or chart patterns to confirm the significance of the UBB breakthrough. For example, i have drawn a resistance zone. Volatility Expansion: Breakouts above the UBB are often accompanied by an expansion in volatility. This increased volatility contributes to the momentum of the rally, attracting more market participants. in this chart the above phenomenon happened two times and was a successfull entry. While going through charts it has also failed you can see itc and hindustan uniliver where it has failed. So add more confirmations of breakout like volume indicator or momentum indicators like rsi.
NSE:SUNPHARMAEducation
by anuragsahu614
1
Dual Bollinger Band Jackpot Strategy.This is a strategy for Swing Traders who just want to capture the swing and don't want to hold the stock for months. This strategy requires 3 indicators:- Bollinger band (20,2) and Bollinger band (20,1) Volume MACD Trade Setup for Long:- 1] The candle which closes above UB 2, we will call it BREAKOUT CANDLE. The BREAKOUT CANDLE should have following properties; a) The volume of this candle should be greater than previous TWO CANDLE's volume. b) MACD histogram and MACD line should be greater than zero. 2] There should be minimum TWO CANDLES just before the BREAKOUT CANDLE which closed between UB 2 and BASIS. Those TWO CANDLES should consists of atleast one RED CANDLE. And that RED CANDLE should not touch the BASIS. TIMEFRAME:- DAILY CHART. When all of the above requirements is fullfilled we can BUY above the high of BREAKOUT CANDLE. STOPLOSS is 1 point below the low of BREAKOUT CANDLE. TARGET is 2 times the STOPLOSS. DISCLAMER:- this is for educational purposes only. DON'T apply this startegy directly with real money. First do paper trade and see the results and analyse the profitability of this strategy.
NSE:JSWENERGYEducation
by anuragsahu614
2
MACD: Bearish or Negative Divergence1. What is a divergence ? a) A divergence takes place when the MACD indicator (or any other technical momentum indicator) contradicts price. b) A divergence is often seen as a sign that the current market action is losing its momentum and weakening, meaning it could soon change direction. c) One of the most common problems with divergences is ‘false positives’, which is when the divergence occurs but there is no reversal. 2. What happens generally post a divergence ? The price market makes an all-time high and the MACD indicator below makes a lower high. This is another excellent reversal trade opportunity and you can see for yourself what happened with price after the event.
NSE:JTLINDEducation
by URANOUSCOLD
What Is the RSI Indicator & RSI DivergenceRSI - Relative Strength Index Indicator: The Relative Strength Index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. It is important to note that the RSI does not indicate whether a stock is a buy or a sell; rather, it provides insight into the current trend of the stock. The RSI is a versatile indicator that can be used by traders of all levels and can be adapted for any style of trading. For example, a trader may use the RSI to identify support or resistance levels, or to spot divergences that can be used to predict future price movements. The RSI can also be used to locate potential trading opportunities by looking for overbought or oversold conditions. Furthermore, the RSI can be used in combination with other indicators, such as moving averages, to gain a better understanding of the market’s overall trend. Formula of RSI: The RSI is calculated using a formula that compares the magnitude of recent gains against recent losses over a specified period. The formula for the RSI is: RSI = 100 - (100 / (1 + (Average of Upward Price Movements / Average of Downward Price Movements))) What is periods in RSI: Periods in RSI (Relative Strength Index) are the number of time periods used to calculate the RSI. The most commonly used period for RSI is 14, but other periods such as 7, 9, and 25 are also used. This number represents the number of time periods that are used to calculate the RSI, so a period of 14 would mean the RSI is being calculated using the last 14 time periods. RSI divergence: RSI divergences are a type of technical analysis used to identify potential trend reversals in the markets. They are based on the Relative Strength Index (RSI) and are used to spot potential trend reversals before they occur. A divergence occurs when the price of an asset makes a higher high, but the RSI makes a lower high. This suggests that the current rally is losing momentum and may reverse course. Similarly, a lower low in the price and a higher low in the RSI may signal an impending rally. Divergences are best used in conjunction with other technical indicators and analysis to confirm price action. It is also important to keep in mind that divergences do not always lead to reversals and may simply signal a period of consolidation before the price continues its current trend. Divergence Cheat Sheet / Types of Divergence:
Education
by AfnanTAjuddin
1
'Verse' of 'Reverse' Candlestick Pattern-> Definition of Reversal patterns :- Reversal patterns mean the formation of candlesticks which indicate the end of the existing trend (uptrend or downtrend). When such formation appears in a downtrend, it indicates a bullish reversal or end of selling spree and onset of buying spell. Conversely, when a trend reversal pattern forms in an uptrend, it warns traders of a possible end to bullish run and onset of a slump. Candlestick patterns are visual patterns, helping traders to visualize when market sentiment is shifting, which is why many traders prefer candlestick charts over other trading tools. However, any trend reversal indication must conform with other popular technical trading tools. -> Engulfing Patterns :- An engulfing pattern is a two-candle formation that signals trend reversal, and hence, there are bullish engulfing and bearish engulfing. The bearish engulfing happens in the uptrend. The first candle is a white/green candle that forms in the uptrend. The second candle opens higher than the previous session and then closes below the previous. It indicates that the bullish force made a final thrust before bearish forces took over. The opposite of bearish engulfing is bullish engulfing, and it appears at the bottom of a downtrend. ->Doji :- Doji is a unique formation – a candle with no real-body but with shadows. Doji can take many forms like Doji Star, Dragonfly Doji, Gravestone Doji, Long-legged Doji, and more. It is often associated with market indecision before a trend reversal. Apart from Doji star, Dragonfly Doji and Gravestone Doji also indicate a trend reversal; but to base your trading decisions on them, those must concur with other popular trading tools like moving average, RSI, or moving oscillator. Doji formations often have no real-body, means that the opening and closing price is almost the same, or the market has reached an equilibrium where neither the buying not the selling strengths are strong enough to give it a direction. -> Abandoned Baby :- Apparently, an abandoned baby is a more decisive trend reversal pattern than Doji. It is a rare formation, but when it appears, it is a strong enough indication for traders to alter their position accordingly. Since it is a trend reversal pattern, an abandoned baby can appear in both uptrend or downtrend. An abandoned baby is a Doji star that appears between two candles – the first one appearing in the direction of the trend and the second confirmation candle appearing in the reversed trend, either bullish or bearish. The shadow of the first candle mustn’t overlap the second candle. The star appears above or below the trend, looking abandoned, hence the moniker. -> Hammer Pattern :- Hammer is a single candle pattern that appears in a downtrend implying a trend reversal to bullish. It usually has a small real-body and a long downward shadow. It indicates that the market fished for the bottom but eventually buying forces were strong to push the market up – the result is a bullish or green candle comprising a short real-body. The candle appearing next to the hammer must confirm the trend reversal to form a trading strategy. It must close above the last candle formed before the hammer. The opposite formation of a hammer, an inverted hammer which appears in an uptrend, is also a trend reversal pattern. In this case, the color of the hammer doesn’t matter, but the upper shadow is twice the size of its real body. An inverted hammer requires stronger confirmation candles to ascertain trend reversal. Another similar formation that appears in the candlestick chart is called a hanging man. It is a hammer that appears in uptrend. When the hanging man appears after a rally, it indicates a trend reversal. It needs further confirmation from the following candles appearing in the trendline. If those appearing in a downtrend, the hanging man confirms a downward trend reversal. -> Piercing Line :- A piercing line is a two-candle formation – a bearish long-bodied candle and another bullish candle which opens at a gap and closes at the midway of the bearish candle. Both candles have robust long bodies. It shows that the market started in bearish impulse, but eventually, buyers gained momentum to pull the market up and reserve their position. -> Harami Pattern :- Harami patterns are common and can be both bullish harami and bearish harami. In Japanese, the word translates to pregnant. It is a two-candle formation where the second candle is a small-bodied candle that opens and closes within the body of the first candle, representing a pregnant form. In the case of Harami Cross, the second candle is a Doji star. A Harami is a reversal pattern, but it isn’t as strong as the hammer and needs confirmation from other technical trading tools like RSI, MACD, and the like. My OBSERVATION :- These reversal patterns works very well when used with RSI, In case of indices, when RSI is above 65 or below 35 any such pattern visible indicates reversal and In case of stocks, when RSI is above 70 or below 40 any such pattern visible indicates reversal.
NSE:NIFTYEducation
by Chaser30
64
How to trade like a PRO on the basis of Technical Analysis. In this analysis we'll look how the Professional Trader explore the chart before executing their Trade. Demand Zone - Fib Retracement - Candlesticks - Divergence - Divergence warns that the current trend is getting weakening and it might possible that the trend get changed in up coming session. Volume Profile - POC - Point Of Control It's the Big guys who moves and manipulate the market, The Retail Traders can't. This is Not investment advice. It's just for learning purpose. Invest your capital at your own risk. Please like, share & follow.
NSE:METROPOLISEducation
by TheGopal
32
RSI RANGE SHIFT StrategyFor Beginners who don't know the real meaning of RSI RSI---RELATIVE STRENGTH INDEX As the name says it shows the strength of a particular stock or index. More the RSI more the strength RSI above 40 indicates very little strength 50/60+ RSI stocks indicates very good strength....But RSI above 80 indicates that the stock is little overbought and may consolidate but doesn't mean it will fall... RSI below 40 stocks should never be bought...RSI below 40 is oversold but the stock might not bounce back as the strength is weak...So buying a stock with RSI above 50/60 is the best and SHORT selling below 30/40 is the best option... RSI RANGE SHIFT STRATEGY: It's a simple swing trading strategy When RSI is falling and bounces back from 40...it is a buy for the stock once RSI is heading towards 60 It is a SHORT SELL if RSI 40 support is broken This strategy has to be combined with PRICE ACTION to get a good RISK/REWARD ratio. FOLLOW me for more such content ahead...Till then, HAPPY TRADING :)
NSE:NIFTYEducation
by keshevdugar
6
Bullish RSI Divergence -A case study and future recommendationRSI Divergence refers to the deviation of RSI with respect to price. Even though the price may be going in a set direction (say making lower lows), the RSI could go in a completely different direction (higher lows). RSI is a clearcut indicator of buyer strength or buyer accumulation at a specific given time and price. An RSI Divergence generally is strongly related to change in trend. RSI Divergence can be of 2 types: Bullish and Bearish. Here I shall discuss about Bullish RSI Divergence. In case of Bullish RSI Divergence, the price makes a lower low (in a downtrend) while the RSI makes higher lows (a sort of W formation). This shows that even though the price is dropping, the buyer strength and accumulation is increasing. Please refer the image above for visual example. How to trade? In case of bullish divergence, one should go long with a SL below the low of the present price. In the present case, one can go long in Amaraja with a SL of 660 and for a target of 800-850
AEducation
by tksthathachari
35
#1 RSI(Relative Strength Index)100%Work# WE WILL MAKE ONLY PROFIT #The relative strength index (RSI) is a popular momentum oscillator developed in 1978. The RSI provides technical traders with signals about bullish and bearish price momentum, and it is often plotted beneath the graph of an asset's price. #What Does the RSI Tell You? The primary trend of the stock or asset is an important tool in making sure the indicator’s readings are properly understood. For example, well-known market technician Constance Brown, CMT, has promoted the idea that an oversold reading on the RSI in an uptrend is likely much higher than 30% and that an overbought reading on the RSI during a downtrend is much lower than the 70% level.1 As you can see in the following chart, during a downtrend, the RSI would peak near the 50% level rather than 70%, which could be used by investors to more reliably signal bearish conditions. Many investors will apply a horizontal trendline between 30% and 70% levels when a strong trend is in place to better identify extremes. Modifying overbought or oversold levels when the price of a stock or asset is in a long-term horizontal channel is usually unnecessary. A related concept to using overbought or oversold levels appropriate to the trend is to focus on trade signals and techniques that conform to the trend. In other words, using bullish signals when the price is in a bullish trend and bearish signals when a stock is in a bearish trend will help to avoid the many false alarms that the RSI can generate. #Example of RSI Swing Rejections Another trading technique examines the RSI’s behavior when it is reemerging from overbought or oversold territory. This signal is called a bullish “swing rejection” and has four parts: 1. The RSI falls into oversold territory. 2. The RSI crosses back above 30%. 3. The RSI forms another dip without crossing back into oversold territory. 4. The RSI then breaks its most recent high. As you can see in the following chart, the RSI indicator was oversold, broke up through 30% and formed the rejection low that triggered the signal when it bounced higher. Using the RSI in this way is very similar to drawing trend lines on a price chart. IF YOU NEED ANY HELP JUST COMMENT OR MESSAGE M😊😊
NSE:BANKNIFTYEducation
by UnknownUnicorn22712522
37
📉 Your Ultimate Guide to RSI Divergence (Settings & Tips) 📈 Hey traders, Relative strength index is a classic technical indicator . It is frequently applied to spot a market reversal. RSI divergence is considered to be a quite reliable signal of a coming trend violation and change . Though newbie traders think that the application of the divergence is quite complicated, in practice, you can easily identify it with the following tip s: 💠First of all, let's start with the settings . For the input , we will take 7/close . For the levels , we will take 80/20 . Then about the preconditions : 1️⃣ Firstly, the market must trade in a trend (bullish or bearish) with a sequence of lower lows / lower highs (bearish trend) or higher highs / higher lows (bullish trend). 2️⃣ Secondly, RSI must reach the overbought/oversold condition (80/20 levels) with one of the higher highs/higher lows. 3️⃣ Thirdly, with a consequent market higher high / lower low, RSI must show the lower high / higher low instead. ➡️ Once all these conditions are met, you spotted RSI Divergence . A strong counter-trend movement will be expected. Also, I should say something about a time frame selection . Personally, I prefer to apply it on a daily time frame , however, I know that scalpers apply divergence on intraday time frames as well. ❗️Remember, that it is preferable to trade the divergence in a combination with some price action pattern or some other reversal signal. ❤️Please, support this idea with a like and comment!❤️
Education
by VasilyTrader
3
divergence set up - some basic learningwhat is Divergence ? 👇 Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction what is Oscillator ? 👇 An oscillator is a technical analysis tool that constructs high and low bands between two extreme values, and then builds a trend indicator that fluctuates within these bounds. Traders use the trend indicator to discover short-term overbought or oversold conditions. how is Oscillator used in Trading ? 👇 Oscillators are chart indicators that can assist a trader in determining overbought or oversold conditions in ranging (non-trending) markets. Most traders use multiple oscillators to confirm range extremes and for determining the important entry and exit points. 🛑Indicators for spotting the divergence indicator patterns are the Awesome Oscillator, macd, the RSI, CCI or stochastic.🛑 disclaimer - personal view (can be wrong)
Education
by sankhyainvestments
13