KT RSI Divergence indicator
MT4 | MT5

Input Parameters

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 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 Divergence

• 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."