Qazi Forex Tips
In this lecture
- What the RSI measures (14 periods, 0–100, 70/30)
- Regular bullish and bearish divergence
- Hidden bullish and bearish divergence
- How the strategy was tested and how to apply it
Lesson notes
RSI in one paragraph
The Relative Strength Index measures the speed and direction of price, usually over 14 periods, on a 0–100 scale. Above 70 is often called overbought and below 30 oversold, but in strong trends RSI can stay there for a long time.
Regular divergence: a possible reversal
- Bullish: price makes a lower low, RSI makes a higher low. Selling pressure is fading.
- Bearish: price makes a higher high, RSI makes a lower high. Buying pressure is fading.
Hidden divergence: trend continuation
- Hidden bullish: price makes a higher low, RSI makes a lower low, inside an uptrend.
- Hidden bearish: price makes a lower high, RSI makes a higher high, inside a downtrend.
Hidden divergence helps you join a trend after a pullback.
Confirmation before entry
Divergence is a warning, not an entry signal. Wait for price to confirm it: a break of a small trendline or structure, or a strong candle from a support or resistance zone. Place the stop loss beyond the swing that formed the divergence, and backtest the rules on your own symbol before trading them live.
Khulasa (Roman Urdu / Hindi)
- Regular divergence: trend kamzor ho raha hai, reversal ka imkaan.
- Hidden divergence: pullback ke baad trend jari rehne ka ishara.
- Divergence warning hai, entry nahi; confirmation ka intezar karein.
- Apne symbol par pehle backtest karein.
Questions
What is the difference between regular and hidden divergence?
Regular divergence warns of a possible reversal; hidden divergence suggests the current trend will continue after a pullback.
Is RSI divergence enough to enter a trade?
No. Use it as a warning and wait for price confirmation, such as a break of structure or a strong candle at a support or resistance zone.
What are the best RSI settings for divergence?
The default 14 periods is the most used.
Is RSI divergence reliable?
It is a useful warning, but in strong trends divergence can appear many times before price turns. Wait for confirmation.
What is the difference between RSI overbought and divergence?
Overbought means RSI is above 70; divergence compares RSI swings with price swings.
Which timeframe is best for RSI divergence?
H1 and H4 give clearer signals than M1–M5.
Related lessons
Money management plan: grow a small account step by stepPrice Action Basics
Support and Resistance: how to draw it, and why it failsMarket Analysis
Rule-based multi-timeframe analysis (top-down)Education only, not financial advice. Trading forex, Gold and CFDs carries a high risk of loss. Examples are for learning; test any method on a demo or in a simulator before using real money.