How to Use RSI Divergence Indicator for MT4
If you want to increase your income stream, forex trading is a viable option for you to consider. While the market presents tons of opportunities, using the right technical indicator can help improve your earnings. If you are a beginner and you are looking to make consistent profits, one indicator you should give serious attention is the RSI divergence indicator for MT4.
If you implement a buy order at the wrong time, you are certainly at the verge of kissing your hard-earned money goodbye. The indicator was designed to help you determine the best time to enter a trade position so that you don’t make this costly mistake. Whether you are a novice or a veteran, this technical indicator will cover your inadequacies as long as you trade on the MT4 platform.
The indicator will also boost your confidence level and provide you with amazing features that will make it easy for you to trade any currency pair. What about trading at oversold or overbought levels? The RSI divergence indicator for MT4 is a must-have to achieve this feat.
In this article, we will walk you through how to install and use this indicator so that you don’t lose money to market forces.
What is RSI Divergence Indicator?
Divergence can be defined as the disparity between the price chart and an oscillating indicator. While there are several oscillating indicators already pre-installed on the MT4 trader, determining the divergence between the price chart and the oscillating indicator you choose to use can be a difficult task.
Divergence usually occurs before a sharp reversal; that is why you need to understand divergence trading before you consider entering a reversal; otherwise, your trading effort won’t be fruitful. If you install the RSI divergence indicator for MT4, you would be able to enter a reversal easily. On our website Best MT4 indicators we give you weekly tips and tricks for some off the best forex indicators.
Features of RSI Divergence Indicator
The following are the amazing features of this indicator:
• Trading Time: The RSI divergence indicator for MT4 can be used at any time of the day. However, ensure you look out for economic indicators because they are a determining factor in any trade.
• Currency Pairs: Using this technical indicator means you can trade any currency pair of your choice, commodities, and indices. Whether you want to trade EUR/USD, USD/JPY, or GBP/USD, this indicator will enable you to trade confidently without the fear of losing your money.
• Trading Platform: While there are several technical indicators that support more than one trading platforms, including MT5 and WebTrader, the RSI divergence indicator for MT4 was built specifically for MT4.
• Time Frame: This indicator supports a wide range of time frames, but we suggest you limit your time frames to D1 and H4. The reason is that during D1 and H4 time frames, the market is usually less noisy, plus, you will be able to see all the price patterns on the chart. TIP: Read our latest best forex revesal indicator article to improve your trading skills.
How to Install RSI Divergence Indicator on MT4
The following is a step-by-step guide on how to install the indicator on your MT4 trading environment:
• Download the RSI divergence indicator or purchase the same from the MQL4 market.
• Save the indicator in a new folder and give the folder a name
• If the indicator comes with “rar” extension, then extract the .mq4 or .ex4 file.
• Launch your MT4 trader
• Click your file tab and select the “Open Data Folder,” Once you select this folder, it will open a new window.
• Look out for the folder titled “MQL4”
• Click the MQL4 folder and navigate to click a sub-folder titled “Indicators”.
• Look out for the RSI divergence indicator from the indicator folder.
• Copy and paste the indicator to the “indicator” sub-folder you opened earlier.
• Restart the MT4 trader
• The RSI divergence indicator should appear on your MT4 trader.
How to Use the Indicator
Using the RSI divergence indicator is pretty easy if you follow the rules below.
Buy Order Rules
Before you place a buy order, ensure you observe the following conditions:
• A candlestick pattern or a bullish price pattern
• A bullish divergence
• The RSI’s trough should visit 30% below the oversold area
• Set your stop loss very close or below the entry candle
• The take profit should be at least twice the risk
Sell Order Rules
Before you sell any currency pair, ensure you observe the following conditions:
• A bearish divergence
• A bearish candlestick pattern or a price pattern
• The RSI’s peak should visit at least 70% above the overbought area
• Set the stop loss at the swing sharply above the entry candle
• Set the take profit very close to the recent swing low
Final Words On RSI divergence indicator for MT4
The RSI divergence indicator for MT4 is a powerful indicator every forex trader should install on their MT4 trading platform. If you don’t have the skills to analyze trade patterns and divergence, download and install this indicator so that you can trade on auto-pilot.
There are other technical indicators available here for you. So check it via this link. If you incorporate these indicators into your trading arsenal, there is a high chance of improving your skills and earnings.
Is it not exciting? Share with us your trading experience using RSI divergence indicator for MT4. Leave your comments in the section below on Best MT4 Indicators.