RSI Stochastic Oscillator Hidden Divergence Forex Trading Strategy [8877]

Forex RSI Stochastic Oscillator Hidden Divergence Forex Trading Strategy  – The most discussed techniques in trading are the divergences.

And this “RSI Stochastic Oscillator Hidden Divergence” is a high accuracy trading system that might be very useful in a trader’s arsenal of techniques.

So, what are divergences? Divergences are basically discrepancies between an oscillating indicator and the price action itself.

Let’s test how effective the “RSI Stochastic Oscillator Hidden Divergence”  trading system is in the forex market.

• Time Frame: M5 or higher
• Currency Pairs: Any

 

• Stochastic Oscillator
• RSI

 

• Download “ForexWOT.Com-RSIStochasticOscilatorDivergenceSystem” (Zip/RAR File).
• Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
• Copy the “ForexWOT.Com-RSIStochasticOscilatorDivergenceSystem.tpl” file (template) to your Metatrader Directory …/templates /
• Start or restart your Metatrader Client.
• Select Chart and Timeframe where you want to test your forex system.
• Right click on your trading chart and hover on “Template”.
• Move right to select “ForexWOT.Com-RSIStochasticOscilatorDivergenceSystem” trading  system and strategy
• You will see “RSI Stochastic Oscillator Hidden Divergence Trading System” is available on your Chart

 

• Identify potential peaks on the Stochastic Oscillator indicator.
• Identify the corresponding peaks on the price chart.
• Try to assess if the next peak on the Stochastic Oscillator indicator would be lower/higher than the previous peak.
• Try to assess if the next peak on the price chart would be higher/lower than the previous peak.
• If so, a hidden bearish divergence might be formed.
• Enter a BUY market order on the candle close corresponding to the RSI Oscillator closes above the level 55 line.

 

• Identify potential peaks on the Stochastic Oscillator indicator.
• Identify the corresponding peaks on the price chart.
• Try to assess if the next peak on the Stochastic Oscillator indicator would be lower/higher than the previous peak.
• Try to assess if the next peak on the price chart would be higher/lower than the previous peak.
• If so, a hidden bearish divergence might be formed.
• Enter a SELL market order on the candle close corresponding to the RSI Oscillator closes below the level 45 line.

 

Divergences, although not perfect, are very powerful techniques to use. For one, the Stochastic Oscillator indicator is a powerful tool to use for mean reversion setups. However, combined with RSI Momentum, it becomes even more powerful.