Trading Regular RSI Divergence with Confirmed Price Swings
Summary
The article describes an automated strategy for regular RSI divergence. It stores recent confirmed swing highs and lows, then compares price and RSI across swing pairs separated by a configurable number of bars. A lower price low alongside a higher RSI low signals bullish divergence; a higher price high with a lower RSI high signals bearish divergence. A tolerance check is intended to screen out unclean patterns, and entries are taken at the confirmation bar’s close. The EA also offers fixed lot sizing, optional stop loss and take profit levels, trailing stops, and chart drawings of swings and divergence lines.
The implementation is presented as an MQL5 example with adjustable RSI, swing, and trade settings. The article says backtesting was performed but supplies no figures or report details in the provided text, so it offers no usable evidence of profitability or robustness. Swing confirmation introduces delay, and divergence can persist without a reversal; the stated signal logic and risk controls therefore require testing across instruments and market conditions before practical use.
Key ideas
- Regular bullish divergence pairs a lower price low with a higher RSI low, while bearish divergence pairs a higher price high with a lower RSI high.
- Swing strength and minimum and maximum spacing settings define which price turns are compared.
- A tolerance check is used to reject divergence patterns that fail the specified cleanliness condition.
- The example enters at the confirmation bar close and supports stop, target, and trailing stop controls.
- Backtest results are mentioned but not reported in the supplied text.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.