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The most important for me :
Indicate Bullish and Bearish Divergence
Divergence between the RSI and the price indicates that an up or down move is weakening.
Bearish Divergence occurs when prices are making higher highs but the RSI is making lower highs. This is a sign that the upmove is weakening.
Bullish Divergence occurs when prices are making lower lows but the RSI is making higher lows. This is a sign that the downmove is weakening.
It is important to note that although Divergences indicate a weakening trend they do not in themselves indicate that the trend has reversed. The confirmation or signal that the trend has reversed must come from price action, for example a trend line break.
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Nicolas Longchamp, Realtime Forex.
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