What is RSI convergence and divergence?

What is RSI convergence and divergence?

RSI Convergence: RSI Convergence forms when price goes down and makes lower lows, and at the same time, RSI goes up and makes higher lows. Sometimes, MACD also forms a divergence or convergence at the same time that there is RSI Divergence or Convergence.

Can RSI show divergence?

With RSI divergence, the relative strength index of a specific stock shows lower highs when the price uptrend hits higher highs. Conversely, when the price is trending downward, it will hit lower lows with divergence while the RSI hits higher lows.

What does RSI divergence indicate?

An RSI divergence indicator signal shows traders when price action and the RSI are no longer showing the same momentum. When RSI stops breaking out to higher highs during an uptrend in price or breaking down to lower lows when price is in a down trend then it is said to be an RSI divergence.

What is a bullish divergence on a RSI?

A bullish divergence occurs when the RSI creates an oversold reading followed by a higher low that matches correspondingly lower lows in the price. This indicates rising bullish momentum, and a break above oversold territory could be used to trigger a new long position.

What does a divergence on the RSI mean?

An RSI divergence is saying that the indicator does not agree with the price action. A bullish divergence is signaled when the RSI indicator has an oversold reading then a higher low that correlates to lower lows in the price action.

When to use MACD and RSI divergence or convergence?

RSI Convergence: Sometimes MACD also forms a divergence or convergence at the same time that there is RSI divergence or convergence. Having MACD and waiting for both of the RSI and MACD to form divergence or convergence at the same time, will considerably lower the positions risks.

When does RSI divergence and convergence occur in a bear market?

This pattern forms at the bottom of bear markets (downtrends) is also a reversal pattern indicating that the downtrend will reverse and the price will go up soon. Like RSI Divergence, RSI Convergence usually forms sooner than price reversal. Therefore, it is an early and leading signal indicating that price will go up soon.

How to find RSI divergences in ProRealTime?

On the price window (or on the RSI window) click on the wrench symbol, then choose “Add indicator” and click on the indicator “mio-divergenza-rsi”. Does it work like this? i have only “Mio-rsi sui prezzi” as indicatore available, is it this one? Andy, that was another code I made.