Introduction to the RSI FWA Divergence Indicator
The RSI FWA Divergence indicator scans and displays divergences between price and the RSI indicator.
That gauge is capable of recognizing both bullish and bearish divergences. You can successfully utilize low-risk trend reversal trading in both bullish and bearish markets.
It is a pretty versatile tool as it fits best for scalping, day trading, and swing trading.
It fits all kinds of timeframes and currency pairs.
The indicator is displayed in a separate window placed just below the main trading chart.
The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.
How does it work? How to apply in trading?
Trading Rules Explanation
Signals provided by the RSI FWA Divergence Indicator are really intuitive and will not cause you difficulties. Simply follow the suggestions below.
Buy Entry: A buy entry point (long trade) occurs when the RSI FWA Divergence indicator provides recognized bullish divergence below the 50 level. You will see a divergence line drawn in conjunction with check marks. Place your stop loss a few pips below the last swing low.
Sell Entry: A sell entry point (short trade) occurs when the RSI FWA Divergence indicator provides recognized bearish divergence above the 50 level. You will see a divergence line drawn in conjunction with check marks. Place your stop loss a few pips above the swing high.
Exit Trade / Take Profit: Close your open position when the RSI reaches 70 level for buy or 30 level for sell, or use your own preferred method of trade exit.
As always, to achieve good results, remember about proper money management. To be a profitable trader you need to master discipline, emotions, and psychology. It is crucial to know when to trade, but also when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility conditions, beyond major sessions, exotic currency pairs, wider spread, etc.
Example of AUD/CAD H1 Chart
This screenshot below shows an example of the RSI FWA Divergence Indicator in action.
How to set up the RSI FWA Divergence indicator in MT4?
Copy and paste the RSI_FWA.ex4 or RSI_FWA.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your MT4 terminal. In the Navigator find the gauge name, right-click it and select Attach to the chart.
The RSI FWA Divergence indicator is well worth adding to your trading collection but remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your own trading system based around it.
RSI FWA Divergence Indicator Free Download
To download the RSI FWA Divergence Indicator for Metatrader 4 (MT4) for free just click the button below: