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Rsi_divergence

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
Trading indicators Trading indicators are mathematical formulas that give you a way to plot information on a price chart. This information can be used to identify possible signals, trends, and shifts in momentum. In simple terms, trading indicators can highlight when something might be happening. Learn how to understand the concept of a stock trading indicator, how it affects your trading results and how to use to your benefit during day trading! Volume Weighted Average Price (VWAP) ... Bollinger Bands Trading Indicator. ... Moving Average Convergence Divergence (MACD) ... Fibonacci Trading Indicator. ... Pivot Points.
NSE:HDFCBANKEducation
by SkyTradingZone
3
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
Simple Combination of Price Action and Oscillator for Breakouts.👉 Introduction Breakouts are crucial in trading because they offer opportunities for quick gains through momentum. However, trading breakouts can be challenging. Around 80% of breakouts fail due to market inertia—where markets tend to continue their existing behavior. When a range attempts to break a comfort zone, some participants defend their positions, causing temporary failure. But remember the fundamental nature: a range will eventually convert into a trend, and a trend will eventually revert to a range. The Problem:- How Does A Breakout Fail? If you know how a breakout fails then there may be some chance that you can avoid trading those setups. 🗯Let's look at the first chart of BECTORFOOD on a daily time frame, A two-month-long ascending triangle range has been formed With a horizontal resistance of 1250. 1. There are good reasons to trade the breakout. a. An ascending triangle is an inherently bullish pattern. b. The resistance is strong and very good to trade its breakout. c. Volume was high before the breakout candle a good confirmation. Still the breakout field why? 2.Volume Action Factor 👉Let's look at an hourly time frame, On 7th of February Price opened slightly gap up on good volume but the candle was not able to sustain the high, and then the price attempted to break the resistance again at the closing of the session but again bears pushed price down with high volume. 👉The next day Price went above resistance On dry volume and then the sell-off started. 3. Oscillator confirmation Factor 👉Oscillators work well in the range bound market it shows the upper and lower range movement. 👉If you look at the chart the price was making a new high but the RSI was forming a bearish divergence (marked by a red dashed line ), and it hit the overbought zone before the breakout. 👉The stochastic was also in the upper zone before the breakout indicating a peak of price movement. 4. Broader Market Factor. 👉Let's compare the movement with the broader market direction, On the 7th of February the NIFT50 index started to sell off there was pressure building from all-time high resistance. 👉So the BECTORFOOD also followed that move and fell more than the index. One More Example:- 👉DHANI SERVICES chart, A clear resistance zone formed at 44.70 but if you see on the chart the oscillators got overbought On daily and hourly timeframes. 👉The volume action on the hourly timeframe also not good because when the price approached the resistance bearish volume increased and then the price went into consolidation and stochastic stayed in the higher zone and RSI started to decline from the overbought zone potential signal for weakness The Solution 👉IBREALEST Hourly chart, Volume spiked before the breakout a good sign and the RSI and stochastics are approaching the overbought zone but they had not become overbought before the breakout, when the breakout occurred the volume was supporting and even on the small range candle the volume is equal to its previous candle. Finally The Breakout Succeded. 👉By keeping these small and simple factors in mind while planning your trades you can minimize the wrong entries and also use price filtering methods like taking a trade on only closing basis of a particular candle above the resistance zone, And applying it with the concept of interpretation of chart pattern according to market phase idea published earlier Thanks For Reading so far, I hope this idea added Some value. Please like and comment. Keep Learning, Happy Trading.
NSE:BECTORFOODEducation
by SANJAYPATIDAR_
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
Perfect example of DOUBLE BOTTOM With DIVERGENCENSE:VOLTAS Double bottom is always a perfect pattern for LONG ENTRY. But I prefer to add some more factors which increases my probability to achieve the target. In this analysis tutorial, we will learn that. * After falling wedge pattern breakdown Stock momentum is exhaust near a good Support. - Never Entered in ONE SIDED BREAKDOWN or BREAKOUT. Wait for the Next GOOD SUPPORT - RESISTANCE, Because one sided move Creates a Doubt( maybe its a TRAP for a RETAIL TRADER like us). - ONE SIDED BO-BD can be a FAKE BO-BD ( In Mostly cases ) - And incase, If it's not a Fakeout - Fakedown, But a genuine one and we missed that - DON'T PANIC - Never entered in FOMO because this can spoil our RR. - THIS STRATEGY IS A SOLUTION FOR ALL THE ABOVE SITUATIONS. * And at that support( IN BIGGER TIME FRAME) I Found BULLISH DIVERGENCE. - Divergence is basically a manipulation by a big players. - In Bullish divergence with the help of some OSCILATTORS we see PRICE IS DECREASING but AVERAGE PRICE or STRENGTH or VOLUME is INCREASING. - {Opposite in BEARISH DIVERGENCE} - But if there is not any SUPPORT - RESISTANCE - - - - - IGNORE THAT AND NEVER ENTER. - Because WE FOLLOW ONLY&ONLY PRICE ACTION, Indicators is secondary. - And basic principle of PRICE ACTION is - NEVER ENTERD WITHOUT A SUPPORT RESTISTANCE ZONE OR TRENDLINE SUPPPORT OR ZONE. * When this stock Follows all rules of BULLISH DIVERGENCE I took a LONG ENTRY. - COMMENT if you wants to know all the RULES of DIVERGENCE. * Now chart pattern shows a signal of UPSIDE MOVE and our Divergence setup gives us a confirmation of that SO I ENTERED and ACHIEVED THE TARGET I hope this is helpful for beginners and a good revision for a pro players. DIVYA BIHARI DAS this side. THANKYOU SO MUCH. --------- COMMENT ----------- - Your Views - My Mistakes - Next Topic - Anything Relevant
NSE:VOLTASEducation
by DivyaBihariDas
RSI DIvergence for Bull/Bear TrapToday on Nifty, It was a bear trap after consolidation, Generally, we wait for a strong 15-minute candle when breakout/ breakdown happens. Today after the breakdown Nifty again started an upward journey, Most people thought it's going for Retracement Maybe. It spent some time on the breakdown Point. At this time if we see RSI, It was showing strength and was indicating that Nifty will go up and it was Fake Breakdown. In the past 3rd Candle RSI was at 33 and then at the same price level it was at 38, It was a clear signal that It's Bear Trap. RSI divergence help to pick easy trade. NOTE: Just compare past some candles for RSI divergence, Do not go with a long trade setup. Its most useful in intraday trade
NSE:NIFTYEducation
by tbgokani
Tata Motors driving down?Long term perspective Further down side expected in Tata Motors Basis:- 1. 5 day SMA below 20 SMA indicating downtrend 2. RSI on monthly and weekly chart below 40 3. Negative reverse divergence indicated by RSI forming higher bottoms and the chart forming lower bottoms (marked with black arrows) 4. Good red volumes The chart in the post is candlesticks. Reverse divergence can be better seen on the line chart. Do follow, like, share if you like my post Simple analysis. NSE:TATAMOTORS
NSE:TATAMOTORSEducation
by MohitKakkad
FTSE : How to trade with RSI Indicator ( Educational)I explained how to trade high probability trades with using RSI Oscillator in Trending market. RSI Oscillator is fast moving indicator, Observe RSI Divergence failed to change the direction but still you get the pull back, Notice before price fall RSI hitting bottom that is key indication Price is trying to make higher high. Trend is strong on Upside those divergence are profit booking zones. Feel free to ask your doubts.
TVC:UKXEducation
by Jnaneshsd