Trading RSI Convergences in 2025 — Step-by-Step Strategy
Convergences are among the most effective and profitable Forex strategies, especially for selling positions. Despite its simplicity, this strategy can yield significant profits when applied correctly. In this article, we’ll explore what convergences are in Forex and how to trade them, so stay with us. Indicators typically move alongside the price and help confirm its behavior. For example, if the price is bullish, the RSI indicator should reflect bullish signals; conversely, if the price is bearish, the indicator should show bearish signals.
To illustrate, when the price makes higher highs on the chart, the RSI lines should also form higher highs. Similarly, if the price creates lower highs, the indicator should follow suit by making lower highs. These convergences present strong opportunities to open sell positions. At these points, you can anticipate a price drop and take advantage of the trend reversal. This approach is not only straightforward but also one of the most reliable and rewarding strategies in Forex trading.
What is convergence? How does it happen?
Convergence happens when the price makes higher highs, but the RSI indicator forms lower highs, or when the price makes higher highs, but the indicator fails to follow suit. In this case, the divergence between price action and the RSI indicator indicates a weakening of the trend, and a sharp decline in price can be expected. Check the image below for an example of convergence on the XAUUSD chart.
Photo by TradingView
Take a look at the image above. You can clearly see a strong convergence on the chart. After this convergence forms, the price often drops sharply, creating a great opportunity to open a sell position. Notice that while the market is making higher highs, the RSI indicator is forming lower highs. This contrast is what defines convergence. At this point, we can enter a sell trade, align with the sellers, and follow the downward trend to potentially make a profit.
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