Rsi Divergence

RSI Divergence Trading

RSI divergence is a geometric relationship between confirmed price pivots and RSI values at the same timestamps. It is a candidate feature, not a reversal signal by itself.

Divergence Types

Regular (Reversal)

Hidden (Continuation)

RSI Zones

Workflow

1. Get RSI:

   get_indicators(indicator_code="rsi", symbol=<symbol>, exchange=<exchange>, interval=<interval>)
   

2. Identify confirmed pivots with fixed left/right bars or an ATR-reversal rule; exclude the unconfirmed right edge

3. Compare exact timestamps: sample RSI at the two price pivots and apply predeclared price/RSI equality tolerances and pivot-spacing limits.

4. Get candles for chart marking:

   get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<date>)
   

5. Mark divergence:

   draw_chart_analysis(action="create", drawing={
       "type": "trend",
       "points": [
           {"time": <first_swing_time>, "price": <first_swing_price>},
           {"time": <second_swing_time>, "price": <second_swing_price>}
       ],
       "options": {"text": "Bullish RSI Divergence"}
   })
   

6. Wait for confirmation candle (engulfing, hammer, pin bar) at divergence zone before entry

Entry

• Bullish: enter above confirmation candle at support; stop below swing low; target previous resistance
• Bearish: enter below confirmation candle at resistance; stop above swing high; target previous support

Evidence and Validation

• Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
• Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
• Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
• Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
• Research basis: The technical-rule evidence shows oscillator results vary materially across markets and often weaken after costs; RSI extremes and divergence spacing require calibration.

Key Rules

• Define any support/resistance and entry trigger objectively before evaluation.
• Enter only from the specified closed-bar trigger; divergence alone is watch.
• Test timeframe interactions; no 1H minimum is universally reliable.
• Calibrate optional RSI zones and pivot spacing by instrument/regime.
• Do not convert correlated price/structure features into a high-probability claim without calibration.

Related Skills

• divergence-trading — extends RSI divergence with multi-indicator scoring (MACD, Stochastic, OBV)
• macd-trading — MACD divergence combined with RSI divergence strengthens reversal signals