What is RSI divergence?
RSI divergence happens when price makes a new high or low but the RSI doesn't confirm it. Price making a higher high while RSI makes a lower high is bearish divergence; a lower low in price with a higher low in RSI is bullish divergence.
How to spot it
- 1Compare two recent swing highs (or lows) in price.
- 2Compare the matching RSI peaks (or troughs).
- 3If they point in opposite directions, that's divergence.
- 4Divergence at a key level carries more context than in the middle of a range.
Common mistakes
- ✕Treating divergence as a reversal signal on its own.
- ✕Spotting divergence in strong trends, where it can persist.
- ✕Comparing swings that are far apart in time.
When RSI is visible on your chart, momentum (including divergence) feeds into the momentum rule of the grade.
Educational content only. Not financial advice. No pattern or concept guarantees any outcome.
Keep learning
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A liquidity sweep happens when price pushes just beyond an obvious swing high or low, where many stop orders sit, and then quickly reverses back inside.
In smart money concepts, an order block is the last down candle before a strong move up (bullish) or the last up candle before a strong move down (bearish).
Market structure is the sequence of swing highs and lows.
Support is an area where buying has stepped in before, slowing or reversing declines.
A demand zone is a base that price left sharply upward; a supply zone is a base price left sharply downward.
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