Trade Stock Indices

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Best Divergence Indicator

The best divergence indicator is the RSI indicator, traders can use this indicator to check divergence when trading indices.

The two types of divergence -bullish and bearish divergence are explained below.


RSI Hidden Bullish and Bearish Divergence Indices Trading Setups

Hidden divergence is used as a possible sign for a indices trend continuation. Hidden divergence occurs when stock indexes price retraces to retest a previous high or low.


Hidden RSI Bullish Divergence

Forms when stock indexes price is making a higher low (HL), but the oscillator is showing a lower low (LL).

Hidden bullish divergence in indices trading occurs when there is a retracement in an upward indices trend.


Indices Trading Hidden Bullish Divergence

Indices Trading Hidden Bullish Divergence - best divergence indicator


This setup confirms that a retracement move is complete. This divergence indicates underlying strength of an upward indices trend.


Hidden RSI Bearish Divergence

Forms when stock indexes price is making a lower high (LH), but the RSI is showing a higher high (HH).


Hidden bearish divergence in indices trading occurs when there is a retracement in a downward indices trend.


Indices Trading Hidden Bearish Divergence

Indices Trading Hidden Bearish Divergence - best divergence indicator


This stock indexes trading divergence setup confirms that a retracement move is complete. This stock indexes trading divergence indicates underlying strength of a downward indices trend.

 

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