so you're a day trader and you're having
trouble
knowing when the price is actually going
to reverse and you're looking for an
indication
of that reversal one of the main things
that i do on a day-to-day basis
is look for a divergence an rsi
divergence is one of the most powerful
tools that i use in my day trading
strategy
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so after posting the video of how i
scalped the markets
right here i also posted testimonials in
our discord group of trades that i've
actually taken using this strategy
from that i got a lot of dms asking hey
why was that your entry point and then i
realized i forgot to cover one crucial
thing and that is rsi divergence
so let's jump into the charts and i'm
going to show you how to find
an rsi divergence and how to trade off
of it so the trade in particular
that i did was on us 30. i did two
trades it looked like this
basically the previous night it was just
like cascading down and down and down
and i managed to scalp that as well
because going with the trend is
extremely easy so just like scalping
these moves down and taking little
profits here and there it's like
mindless work this is so easy to make
money off of
but then after it started losing
momentum i was like
cool i'm looking for a divergence so
let's put some moving averages up here
first we're gonna do
the 50 and the 200. let's just do the 21
for good measure for me it was late at
night the market was just dumping down
dumping down trading below the 21 and i
just like at any point here you could
have gotten in a short position for any
amount of time
and gone into profit for like two hours
if you guys don't know how to trade
momentum
watch this video but here at the bottom
this is where it got interesting
we started to consolidate and i was like
cool we're losing momentum
what happens when you lose momentum the
price tends to go the
opposite direction so let us pull up an
rsi
so to get the rsi on your charts click
the indicator button up here at the top
type in
rsi it's in the built-ins called
relative strength index
your rsi will look like this what you
need to do
is change the settings so right here on
the bottom just click the little
settings wheel
change the rsi color to yellow in
accordance with the color theme of this
channel
you're going to change the upper band to
50 and
the lower band 250 you're gonna get rid
of the background because
it is useless and that's what your rsi
should look like
if you don't know why go watch this
video so as you can see
the price was moving down and down and
down and down and down and down
eventually when it started to lose
momentum guess where my eyes always go
to the rsi right here we are creating
lower lows consistently
lower lows and lower highs means
a clear and concise downtrend this is
showing everybody
market structure what is a divergence a
divergence is when
two things that should be going in the
same direction
or look the same don't so looking at the
rsi right here
we start seeing higher lows
consistently time and time again
now just looking at it right here
this and this was a divergence
but it is not the divergence that you
want to trade off of
yes we are creating a higher low on the
rsi
and creating a lower low on the price
action but the price
still continued to go down i like to
wait until the rsi divergence
is extremely clear like look at this a
low
a higher low a higher low a higher low a
higher low
then we break above the 50 level when
the rsi is above the 50 level
that's showing bullish momentum that
means it's no longer bearish
it came down one more time just to [ __ ]
with people and that's
when i saw this like nice sloping upward
and i was like cool i'm getting in right
here
and sure as skippy i made a trade
at 32 372
so right here almost the exact
bottom i was thoroughly impressed on
this and then
as the price started to go in my
direction
came down and we got this big long
rejection wick
i got in on another position at 32
417 so right about there
now this is on a one minute chart if you
guys have not noticed yet
and i don't suggest everybody trade on
the one minute chart it's super volatile
and
nine times out of ten you'll get stopped
out but i know what i'm looking for and
i was looking
at higher time frames so if we take
this out to a 15 minute chart
i'm gonna make a box here
so that we know what we were looking at
because i don't want it to get lost
and this is that same price action on a
15 minute time frame
you can see how massively far away we
were from these moving averages
and what does price like to do price
likes to go back to moving averages when
it's over
extended so i saw i did all of my
analysis
on the 15 minute and then to find my
sniper entry
i got down to the one minute so i had
previously marked up my levels of where
that previous moving average was
and i actually just took it up to the 21
day moving average
which was just around 32 500
and so i know that with even numbers
market likes to hesitate so i did it two
dollars below
took my money and walked away so two
trades
very small lot size .02 on us 30.
one trade was 251 dollars and the other
one was 161 dollars
getting me 400 while i slept because
that was at market close so i woke up
and i had the money now you might be
saying to yourself artie why didn't you
hold that you could have made so much
more because
right after that it went to 32 798
i could have made thousands of dollars
yeah i could have
but that's not my strategy i was in it
for a scalp
i wanted a quick move take my money walk
away
i had no idea this massive spike and
rally was going to go
above the 200 moving average but i knew
that the price was going to retrace
to the 21 day moving average so yeah
super simple that's how to spot
an rsi divergence like if the rsi is
going
up but the price action's going down
that means it's eventually
gonna so if you've watched this long
guess what
you like the video so make sure you
leave a big fat thumbs up
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and we will see you later today when i
do a video on trader psychology