RSI - Relative Strength Index - RSI Divergence is one of the "famous" indicators of the trading world. In Metatrader 4 software, RSI is classified as Oscillator, which is an indicator used to measure fluctuations between overbought and oversold poles - of the market.

How to use the RSI indicator

The most basic use of the RSI indicator is the RSI which crosses above the 70 zones and cuts down to sell, on the contrary, the RSI crosses below the 30 zones and crosses up again to buy. Or another way to use the price cut to the 50 zones is the uptrend, the 50 cut is the downtrend (the trend change (. See the below illustration for more details).

However, if it's that much, then the RSI is not that easy to be trusted. Here are some other uses of RSI that many traders still use.

1. Regular Divergence

Divergence is one of the very useful insights into technical analysis. If you are not familiar, then study again in the class (what Divergence is usually). In short, this is a phenomenon where the price makes a new high but the RSI makes a high low, or the price makes a new low, but the RSI makes a high low. It is a "phase difference" between the price and an indicator, which can warn that price strength has weakened and could warn of a reversal.

Let's see the illustration

This method is often used to find a trend reversal

2. Hidden Divergence

This Divergence is a bit contrary to the Regular Divergence mentioned above. At this point, the price makes a low, but the RSI makes a high, or the price makes a high, but the RSI makes a low (See What A Closed Divergence is). This is the method that trend traders often use to find the next entry in a trend

Let's see the illustration

3. Draw the trend line for the RSI

This is also how some "players" use to predict early reversal. If the RSI breaks its trendline - then it could be a sign that the price is down, careful to reverse.

4. Draw a pattern for the RSI

This technique is also used by many traders. Patterns are usually drawn as a wedge or a wedge or two highs with two bottoms... The reversal is expected to occur when price breaks the pattern

5. Identify a new trend with zone 45 - 55

The zone between 45 and 55 is called a trending zone. Only when prices exit this zone will a new trend be created. If cut down 45, it is a downtrend, 55 is an uptrend

The above is one of the more in-depth uses for the RSI indicator. Brothers can refer and use

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