KT RSI Divergence
KT RSI Divergence indicator
MT4 | MT5
KT RSI Divergence indicator show the regular and hidden divergences built between the price and Relative Strength Index (RSI) oscillator. Divergence can depict the upcoming price reversal, but manually spotting the divergence between price and oscillator is not an easy task.
- Ability to choose the alerts only for the divergences that occur within an overbought/oversold level.
- Unsymmetrical divergences are discarded for better accuracy and lesser clutter.
- Support trading strategies for trend reversal and trend continuation.
- Fully compatible for embedding in Expert Advisors.
- Can be used for entries as well as for exits.
- All Metatrader alerts are available.
Limitations of RSI Divergence indicator
Using the RSI divergence as a standalone entry signal can be risky. Every divergence can't be interpreted as a strong reversal signal. For better results, try to combine it with price action and trend direction.
What is a Divergence exactly?
In the context of technical analysis, if the price is making higher highs, then oscillator should also be making higher highs. If the price is making lower lows, then oscillator should also be making lower lows.
When this normal behaviour is not followed, that means the price and oscillator are diverging from each other. There are two types of divergence:
- Regular Bullish Divergence: When the price is making lower lows, but the oscillator is making higher lows.
- Regular Bearish Divergence: When the price is making higher highs, but the oscillator is making lower highs.
- Hidden Bullish Divergence: If the price is making higher lows, but the oscillator is making lower lows.
- Hidden Bearish Divergence: If the price is making the lower highs, but the oscillator is making higher highs.
"Regular divergence is used to identify the trend reversals, and hidden divergence is used to determine the trend continuation."
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