OPEN-SOURCE SCRIPT
RSI Divergence Indicator
The Relative Strength Index (RSI) is a momentum indicator that measures the speed and change of price movements, typically ranging from 0 to 100. It helps identify overbought (above 70) and oversold (below 30) conditions in a market.
Bullish and Bearish Divergences:
Divergences occur when the RSI moves in the opposite direction of the price, signaling potential trend reversals.
Bullish Divergence (Reversal to the Upside)
Price makes a lower low, but
RSI makes a higher low
This suggests weakening selling pressure and a potential upward reversal.
Bearish Divergence (Reversal to the Downside)
Price makes a higher high, but
RSI makes a lower high
This indicates weakening buying pressure and a potential downward reversal.
Divergences are more reliable when combined with other indicators like support/resistance levels and volume analysis.
Bullish and Bearish Divergences:
Divergences occur when the RSI moves in the opposite direction of the price, signaling potential trend reversals.
Bullish Divergence (Reversal to the Upside)
Price makes a lower low, but
RSI makes a higher low
This suggests weakening selling pressure and a potential upward reversal.
Bearish Divergence (Reversal to the Downside)
Price makes a higher high, but
RSI makes a lower high
This indicates weakening buying pressure and a potential downward reversal.
Divergences are more reliable when combined with other indicators like support/resistance levels and volume analysis.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.