Comment by talisman on January 5, 2014 at 2:29am

well im gonna give this my best shot so I either understand, or display my ignorance. each higher high is accompanied with an rsi of over 70, and often over 80, until the double top. the second top has a dropping rsi.  this along with a few other clues like a recent higher low having an rsi higher than what we may anticipate as the first lower low.  the first lower low is actually still higher in price but the rsi tells us there is a potential move down.  I suppose divergence would be what we re looking at.

feel free to scold me harshly if im way out. I ve got a thick skin and I like to learn.

Comment by Pip Logic on January 5, 2014 at 2:16pm

I got a bit carried away with the lines, the double top has an extreme divergence, but is is set to 7, when the default is 14, at 7 there are more setups, but the possibility to get whipsawed is higher if you and not good at dancing with a drunk partner, at 14 you can draw reasonable trend lines on it, RSI leads price, which creates the clues, the index is riding price, so the price is like a horse and the jockey is RSI, the horse keeps changing it's gait, the jockey sees it coming and adjusts to the new pace, (in this analogy the jockey can never fall off and may never even complete the race) so I am looking the jockey's body language to clue me in, the problem with trading is that the size of the track &, horse keep changing, not to mention the horse may decide, to trot down to the city and get drunk all day long.

http://https://www.youtube.com/watch?v=tpNa5eJ2PyE

Comment by Pip Logic on January 5, 2014 at 9:12pm

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