EDUCATION XBTUSD: Using Divergence for Position Opens and Profit (12HR)
Often, divergence is usually referenced more in MACD analysis, but it can also be used with the relative strength index ( RSI ) indicator. Usually, the RSI mirrors the shape of the item being traded on its chart. However, as you can see above, when it differs, it can lead to divergence, and profit. Above, you can see in the blue lines, the price shot up after the divergence, and the pink lines show the price dropping after the divergence. From what I have analyzed, and with the quick swings of price, the 12hr is very accurate in this, but the 8hr, all the way to the 1hr, is fairly accurate as well. The tricky part is to pick when to place the trade for max profits, but usually after 1 bar completion in the right direction is a safe bet.
Just a reminder this is not financial advice, however, if this study helped you make money,
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