How to EASILY detect DIVERGENCE by @bakatools
Here is an easy way to detect that there is a divergence and price will break soon.
First, we add a RSI indicator to chart, then drag it from below onto the main chart where the candles are (overlay). To avoid blocking vision, you can open RSI's style and hide the background, make the line thicken.
Now is how it works. Normally, you will notice RSI goes along with price, if candles go up, RSI go up; candles go down, RSI go down. It will be not much different from the price.
But, if you notice that the RSI line which had been running above the candles, now suddenly running below the candles and it starts SEPARATING AWAY from the candles (as illustrated above), and vice versa, that is the SIGN.
You can now draw a line to connect 2 highest (or lowest) candle peaks, and then draw another line to connect 2 highest (or lowest) RSI peaks. If they CROSS each other, that is a DIVERGENCE. And price will soon break in reversal. Result is the break in ETH uptrend today as we all saw.
Is it easy enough? Share your comment below.
Thanks.
First, we add a RSI indicator to chart, then drag it from below onto the main chart where the candles are (overlay). To avoid blocking vision, you can open RSI's style and hide the background, make the line thicken.
Now is how it works. Normally, you will notice RSI goes along with price, if candles go up, RSI go up; candles go down, RSI go down. It will be not much different from the price.
But, if you notice that the RSI line which had been running above the candles, now suddenly running below the candles and it starts SEPARATING AWAY from the candles (as illustrated above), and vice versa, that is the SIGN.
You can now draw a line to connect 2 highest (or lowest) candle peaks, and then draw another line to connect 2 highest (or lowest) RSI peaks. If they CROSS each other, that is a DIVERGENCE. And price will soon break in reversal. Result is the break in ETH uptrend today as we all saw.
Is it easy enough? Share your comment below.
Thanks.
Comment:
Divergence on BTCUSDT 1H
