Discussing the article: "Automating Trading Strategies in MQL5 (Part 38): Hidden RSI Divergence Trading with Slope Angle Filters"
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Check out the new article: Automating Trading Strategies in MQL5 (Part 38): Hidden RSI Divergence Trading with Slope Angle Filters.
In this article, we build an MQL5 EA that detects hidden RSI divergences via swing points with strength, bar ranges, tolerance, and slope angle filters for price and RSI lines. It executes buy/sell trades on validated signals with fixed lots, SL/TP in pips, and optional trailing stops for risk control.
The hidden RSI divergence strategy focuses on identifying trend continuation opportunities by detecting specific mismatches between price swings and the Relative Strength Index (RSI) oscillator, which highlights underlying momentum strength in ongoing trends. For hidden bullish divergence, the price establishes a higher low while the RSI forms a lower low, suggesting that bearish pullbacks are weakening and the uptrend may resume. For hidden bearish divergence, the price creates a lower high, but the RSI shows a higher high, indicating that bullish corrections are fading and the downtrend could persist.
We intend to enhance reliability by filtering divergences with slope angles on both price and RSI lines to confirm sufficient steepness or flatness, apply tolerance thresholds for clean patterns without breaches, and enter trades accordingly—buying on hidden bullish signals or selling on hidden bearish ones—with defined risk parameters like stops, profits, and trailing mechanisms. By leveraging these elements, we can pursue high-probability continuation setups in established trends. Have a look below at the different setups we could have.
Hidden Bullish Divergence Setup:
Author: Allan Munene Mutiiria