The Strategic Trader
Detailed Strategy Evaluation

RSI Part 7 – Bullish Regular Divergence

In this article we will be testing Bullish Regular Divergence using RSI.

Bullish Regular Divergence
Price: Lower Low
RSI: Higher Low

Using Bullish Hidden Divergence we were able to significantly exceed our targets and prove that there exists a statistical edge when using that method. However, the same can not be said for regular divergence. The strategy produced several combinations which were profitable, but all of the returns were well below our targets. Therefore we can not rule out random chance accounting for those results. Here is a P/L chart from the best combination:

Notice how “random” and volatile the results appear? When compared to the chart produced from the Hidden Divergence article, you can clearly see the difference.  Here is a P&L chart from the Hidden Divergence article.

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