TradingView is a fantastic trading and charting platform and you can find out more about why I switched to TradingView here<\/a>. <\/p>\n\n\n\n Divergence is a term that refers to when the Relative Strength Index (RSI) indicator has a reading that's different (divergent) from price action. <\/strong><\/p>\n\n\n\n Here's an example where the second and third price highs are higher than the first high, but the highs on RSI are lower. <\/p>\n\n\n\n This is a bearish signal, as shown on the bottom of the chart. <\/p>\n\n\n\n As you can see, this trade ended up working out well. <\/p>\n\n\n\n Sometimes it can be difficult to spot these divergences, even if you know what to look for. That's where an indicator can help a lot. <\/p>\n\n\n\n Before I get into the indicator, to learn all of the details about RSI Divergence and see more examples, read this guide<\/a>. <\/p>\n\n\n\n Adding the indicator to your chart is easy. <\/em><\/p>\n\n\n\n Simply click on the Indicators<\/strong> button at the top of the screen in TradingView. Then in the search box, type in: “rsi divergence<\/strong>“.<\/p>\n\n\n\n This will bring up a list of indicators and trading strategies that help with RSI Divergence. <\/p>\n\n\n\n Select the first indicator on the list. <\/p>\n\n\n\n This is the official indicator developed by TradingView. <\/p>\n\n\n\n Once you click on the link, the indicator will be added to your chart. <\/p>\n\n\n\n The indicator has simple settings that you can use to fine tune your signals. <\/p>\n\n\n\n I like when there are only a few settings. <\/p>\n\n\n\n Many times, developers nerd out and create dozens of settings that aren't necessary. <\/p>\n\n\n\n To change the settings, right-click on the indicator and select Settings<\/strong>. <\/p>\n\n\n The next window will allow you to change the settings. The first 2 settings are the standard RSI settings. <\/p>\n\n\n\n Change those settings according what you use. <\/p>\n\n\n The settings that may be a little confusing are explained here:<\/p>\n\n\n\n From there, you can select which divergences you want to see on your chart. <\/p>\n\n\n\n Click the OK<\/strong> button when you're done. <\/p>\n\n\n\n Another fantastic thing about TradingView is that you can setup alerts on most indicators. <\/p>\n\n\n\n That means you can get notifications on the mobile app, or via email. <\/p>\n\n\n\n To setup alerts on the indicator, right-click anywhere on the indicator. Then select Add alert…<\/strong><\/p>\n\n\n At the top of the alert window, select the type of divergence you want to get alerts for. <\/p>\n\n\n\n In this example, I'm setting up alerts for Regular Bearish Divergence<\/strong>. <\/p>\n\n\n Create a separate alert for each type of divergence you want to be notified about.<\/p>\n\n\n\n The great thing about TradingView is that you can use free indicators<\/a> and trading strategies that other people on the platform have developed.<\/p>\n\n\n\n This can help you improve your strategy or test out new ideas. <\/p>\n\n\n\n To see all of the available RSI Divergence<\/strong> indicators and strategies, go through the same steps above to add the RSI Divergence indicator to your chart. <\/p>\n\n\n\n But instead of adding the default indicator under Technicals<\/strong>, look below that in the Community Scripts<\/strong> section.<\/p>\n\n\n\n This is where you can try out other indicators and trading strategies. <\/p>\n\n\n\n In many cases, the user-created scripts aren't great. Just like in the MetaTrader Code Base, most are half-baked. <\/p>\n\n\n\n But once in awhile, you'll find an awesome one that's super useful. <\/em><\/p>\n\n\n\n You can also quickly backtest the trading strategies<\/a> in the Strategy Tester<\/strong>, which gives you instant feedback on how good the strategy is. <\/p>\n\n\n\n So even if you don't see something useful right now, keep checking back because the community is adding new scripts all the time. <\/strong><\/p>\n\n\n\n There are different ways to trade RSI Divergence. <\/p>\n\n\n\n You can learn many RSI Divergence trading methods on blogs or on YouTube. <\/p>\n\n\n\n I've posted some of my backtesting results here<\/a>. My test was profitable, but it needs some optimization. <\/p>\n\n\n\n It's a good starting point though, and you can test out some optimizations for yourself. <\/p>\n\n\n\n The most important thing to understand if you want to be successful with RSI Divergence, is that you have to develop a trading strategy that works for YOU. <\/strong><\/p>\n\n\n\n That means that you have to backtest your RSI trading strategy. You can get started with this tutorial<\/a>. <\/p>\n\n\n\n If you want to learn the complete process, then take my StrategyEVO Backtesting Course<\/a>. <\/p>\n\n\n\n![\"RSI](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/divergence.jpg\")
<\/figure>\n\n\n\nWhat is RSI Divergence? <\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/AUDCHF_2024-01-18_20-04-43.png\")
<\/figure>\n\n\n\nHow to Add the Indicator to Your Chart <\/h2>\n\n\n\n
![\"TradingView](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/tradingview-rsi.jpg\")
<\/figure>\n\n\n\nHow to Set Up the Indicator<\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/settings-1.jpg\")
<\/figure>\n<\/div>\n\n\n![\"\"](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/rsi-dive.jpg\")
<\/figure>\n<\/div>\n\n\n\n
Add a RSI Divergence Alert to Get Notifications on Your Phone<\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/add-alert-1.jpg\")
<\/figure>\n<\/div>\n\n\n![\"\"](\"https:\/\/www.tradingheroes.com\/wp-content\/uploads\/Screen-Shot-2024-01-18-at-8.18.08-PM.png\")
<\/figure>\n<\/div>\n\n\nOther RSI Divergence Tools in TradingView<\/h2>\n\n\n\n
Does RSI Divergence Actually Work? <\/h2>\n\n\n\n
Conclusion <\/h2>\n\n\n\n