RSI divergence , The relative strength index indicator divergence. Forex technical indicators are constructed by manipulating some aspect of price action. There are two kinds of divergence , Bearish divergence and bullish divergence. James wilder believed that divergence pattern between market price action and Relative strength index is very powerful indication that a market reversal point is imminent.
The RSI forex indicator is introduced by J Wilder, The Relative strength index is a oscillating indicator. If Price action moved to new highs , but RSI indicator formed lower highs , it indicates for bearish divergence. If price action moved to new lows but RSI Forex indicator formed higher low , it indicates for bullish divergence. Forex divergence pattern is often call to be a leading indicator. Divergence is price action measured in relationship to carious indicators ie. Moving average, Moving average convergence divergence MACD, RSI , Commodity channel index, Bollinger bands and etc. Hidden divergence takes advantage of market price separating from the RSI indicator.
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Forex is simple follow the trend and you will rich.
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