1 - What Is Divergence And How Can That Improve Your Chances?
When the price is rising and it's making higher highs; the indicator RSI is making lower highs = Divergence
When the price is falling, and it's making lower lows; the indicator RSI is making higher lows = Divergence
Divergence = Price is going to turn around.
A signal to exit opened trade or opening a new trade.
2 - Everything You Need To Know About RSI In Less Than 20 Minutes - And Every Hidden Use Most Courses Don't Teach
OverBought = When the price is rising and RSI goes over 70 | Usually means continuation, at least once more.
OverSold = When the price is falling and RSI goes under 30 | Usually means continuation, at least once more.
Once RSI reached levels of overbought/oversold, it doesn't mean trend reversal but a correction is expected.
If it shows divergence along with an Ending Diagonal, it's a confirmation for future trend reversal.
If there's no divergence, it may continue it's way once corrective phase is done.
The higher the timeframe, The more significant it is.
RSI can also work as a price support/resistance indicator.
When the price gets stuck at the same level and you see RSI getting double bounce at 61.8 (price rising) or 38.2 (price falling)
The chances of continuation happening increases. That's usually where wave A and C, from a corrective wave, stops.
RSI also can be used with Trendlines - Breakout Behavior
Prices can breakout RSI trend lines and retest from the other side
before continuing the new impulsive movement as described in the Wave Principle.
There are other hidden RSI uses, like tracing Fibonacci Retracement in the indicator chart and finding 618 bouncing point.
Remember we use wave analysis, and RSI is painting waves in its chart too.
That means everything you learn in the wave principle can be applied to this indicator.
Testing is a wise decision. If you find a repetitive behavior, that's what we call a pattern and you can trust it.
3 - Follow These Instructions To Get My RSI Installed In Your Trading View
Download My RSI Pine Script Code Here:
If you ever get an error, contact me immediately at firstname.lastname@example.org
4 - Read The Book "RSI: The Complete Guide" - By John Hayden
Click image above to download.
This book has almost everything I teach in this tutorial.
Of course, it's more complicated and has no visuals so it's harder to learn.
I made it simple for you, but if you are like me you are going to enjoy reading this book.
I may miss a thing or two, and it's worth your time reading.
5 - Bonus - Access to Google Slides
In case you want to pause and explore each slide I use in the video tutorial, here's the link to view them in Google Slides.
Congratulations! You finished this tutorial!
I believe this is the only indicator you will need in your journey to become a wave analyst.
I hope you get the best from it and that it really helps you improve your chances.
Remember that simple works better.
It makes things easier and faster to understand. Don't complicate your chart with too many indicators.
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