RSI DIVERGENCE

WHAT IS IT? Up

MEANING

It's a simple disagreement 

between price 
and RSI INDICATOR

SIMPLE

Please do not complicate things, 

Down it is just this simple, 
but nothing else

© METE KAPLAN @InvestingWithMK

RSI DIVERGENCE

4-STEP TRADING STRATEGY

STEP OPTIONAL ACTION

1 NO Con rm RSI DIVERGENCE

2 NO Con rm TRADABLE Higher Highs or Lower Lows (Market Structure)

3 NO Con rm BOXES & PARABOLIC action (Momentum Change)

4 NO Con rm ENRTY (Candle Breakout & Stoch RSI Crossover)

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE

TIME INTERVALS

INTERVAL EXPLANATION

If you use lower time frames, like 5 mins or 1 min, noise increases, and accuracy decreases

1 Day / 4 Hours / 1 Hour Suitable for day and swing traders

30 / 15 / 5 Mins Ok for day traders. Very commonly used with intraday time frames

3 / 2 / 1 Min Scalpers may use for price action ( market structure / momentum change )

© METE KAPLAN @InvestingWithMK

RSI DIVERGENCE
01 Con rm RSI DIVERGENCE

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
01 Con rm RSI DIVERGENCE

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
02 Con rm TRADABLE HH

MARKET STRUCTURE Tradable

Uptrends make Higher Highs (HH) HH 4

and Higher Lows (HL) Tradable

HH 3
No Trade

HH 2
First Signi cant High

HH 1 HL

HL

HL
We can only trade 3rd and later.
(Explained in Step 3)

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
02 Con rm TRADABLE HH

Tradable
Tradable
No Trade 4
3
2

First Signi cant High

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
02 Con rm TRADABLE LL

LH

We can only trade 3rd and later.

LH
(Explained in Step 3)

LH

LL 1 LH

First Signi cant Low

LL 2

No Trade
LL 3
MARKET STRUCTURE
Tradable
Downtrends make Lower Highs (LH)
and Lower Lows (LL) LL 4

Tradable

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
02 Con rm TRADABLE LL

First Signi cant Low

2
3
No Trade
Tradable

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
03 Con rm BOXES / PARABOLICS

Loss of Momentum
4
( UPTREND REVERSAL )
3 HH
HH BOX 3 DOWNTREND
2
BOX 2 LH
HH

1 BOX 1
HL
HH LL
HL

MEANING

BOX (Difference between previous

HL HH and next HH) • Distance between HH (Higher
Highs) become smaller
• Momentum getting weaker,
market structure changing

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
03 Con rm BOXES / PARABOLICS

Tradable Tradable
4
3
No Trade
2 BOX 3
BOX 2

First Signi cant BOX 1

High
1

Never Trade If BOX 2 < BOX 1 If BOX 3 < BOX 2

First Box Tradable Tradable

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
03 Con rm BOXES / PARABOLICS

MEANING
HH
BOX (Difference between previous
LH LL and next LL) • Distance between LL (Lower
Lows) become smaller
• Momentum getting weaker,
market structure changing

LH
1 LL HH
LH
BOX 1

LL
2 BOX 2 HL
UPTREND
LL BOX 3
3
LL
Loss of Momentum 4
( DOWNTREND REVERSAL )

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
03 Con rm BOXES / PARABOLICS

Never Trade If BOX 2 < BOX 1

First Box Tradable

First Signi cant

1
Low
BOX 1

No Trade 2 BOX 2

Tradable 3

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
04 Con rm ENTRY

STOP
STOP
ENTRY
1R ENTRY

2R
Last green candle with
large body. Sellers
TAKE PROFIT
should beat the low of
this candle.

STOCH RSI Crossover

© METE KAPLAN @InvestingWithMK

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RSI DIVERGENCE
04 Con rm ENTRY

ENTRY
TAKE PROFIT

STOP
2R

Last red candle with ENTRY

large body. Buyers
should beat the high of
this candle. 1R
STOP

STOCH RSI Crossover

© METE KAPLAN @InvestingWithMK

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 Mete Kaplan

@InvestingWithMK

Would you like to Learn How to Trade & Invest for FREE?
You may check out my YOUTUBE channel
Disclaimer
All the materials supplied (voice, speech, text, images, documents, or other conveyance of information) and information shared in this document, video,
social media post or blog post are provided for educational and entertainment purposes ONLY.

All the materials supplied (voice, speech, text, images, documents, or other conveyance of information) and information shared in this document, video,
social media post or blog post should not be construed as investment advice, trading advice, or financial advice. The information shared in this
document, video, social media post or blog post is not meant to be a solicitation or recommendation to buy, sell, or hold any financial securities,
assets, or any type of investments.

Mete Kaplan is not registered as an investment adviser or is not a CPA with any federal or state regulatory agency in any country. The information
shared in this document, video, social media post or blog post is my (Mete Kaplan) personal opinion only, which may or may not be accurate.

Any trade that is taken based upon our educational or research materials is at your own risk for your own account. Trading foreign exchanges (forex),
cryptos (cryptocurrencies or coins), stocks, options, commodities, ETFs, mutual funds, index funds, or any other type of financial securities on cash
accounts or margin accounts may not be suitable for all investors and could be highly risky.

Trading results vary and can never be guaranteed. Every type of trading carries a high level of risk. There is a great possibility that you can
sustain losses from your investments. Thus, you should not invest money that you cannot afford to lose. You should do your own research and risk
management before entering a trade or consult with a professional financial advisor. Past performance is no guarantee of future results.

Before buying or selling foreign exchanges (forex), cryptos (cryptocurrencies or coins), stocks, options, commodities, ETFs, mutual funds, index funds, or
any other type of financial securities, you should carefully consider your education about the investing / trading, risk management and risk appetite,
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“Information”) are provided for informational, educational and entertainment purposes only. The Information should not be construed as investment
advice, trading advice, or financial advice. The information is not meant to be a solicitation or recommendation to buy, sell, or hold any financial
securities, assets or any type of investment.

Disclaimer
All the materials supplied (voice, speech, text, images, documents, or other conveyance of information) and information shared in this document, video, social media post
or blog post are provided for educational and entertainment purposes ONLY.

All the materials supplied (voice, speech, text, images, documents, or other conveyance of information) and information shared in this document, video, social media post
or blog post should not be construed as investment advice, trading advice, or financial advice. The information shared in this document, video, social media
post or blog post is not meant to be a solicitation or recommendation to buy, sell, or hold any financial securities, assets, or any type of investments.

Mete Kaplan is not registered as an investment adviser or is not a CPA with any federal or state regulatory agency in any country. The information shared in this
document, video, social media post or blog post is my (Mete Kaplan) personal opinion only, which may or may not be accurate.

Any trade that is taken based upon our educational or research materials is at your own risk for your own account. Trading foreign exchanges (forex), cryptos
(cryptocurrencies or coins), stocks, options, commodities, ETFs, mutual funds, index funds, or any other type of financial securities on cash accounts or margin accounts
may not be suitable for all investors and could be highly risky.

Mete Kaplan @InvestingWithMk

Would you like to Learn How to Trade & Invest for FREE?
You may check out my YOUTUBE channel