![]() So if the RSI indicator is closer to the lower end (let’s say 20), this means that the price has been in a downtrend for a while now and is in the oversold area. That time period is usually configurable and you’ll see that a popular period is 14, meaning that it will use the last 14 candles in the calculation.Īll of this is normalized to a scale of 0 to 100. More specifically, it compares the magnitude of recent gains and losses over a specific time period. It’s a momentum indicator, which means that it measures the speed (or strength) of the movement of a price. Today we will focus on regular (or standard) divergences. Here is a basic cheat sheet for identifying divergences. This is a very basic first guide on RSI and divergence basics – I will expand upon it in future issues. In my case, I primarily use RSI, but the strategy is the same regardless of the indicator. If you have been following me for a while, then you know that my single favorite strategy for identifying trading opportunities is bullish and bearish divergences.
0 Comments
Leave a Reply. |