Strategy Combining VWMA and RSI Divergence



This strategy is based on precisely catching reversal points by combining “trading volume” with “price momentum.” Here are the golden rules:

1 Long Positions:

Signal: Bullish Divergence appears (price forms lower lows while the RSI forms higher lows).

Confirmation: Wait for the candle to close above the purple VWMA line.

Exit: When the price closes below the VWMA or when the RSI reaches the overbought zone (+70).

2 Short Positions:

Signal: Bearish Divergence appears (price forms higher highs while the RSI forms lower highs).

Confirmation: Wait for the candle to close below the VWMA line.

Exit: When the price closes above the VWMA or when the RSI reaches the oversold zone (-30).

Why is this strategy strong?

The VWMA indicator (Volume Weighted Moving Average) gives more weight to candles with high liquidity, which reduces “false signals.” Meanwhile, the RSI provides an early warning before the actual reversal occurs.

Tip: Never enter solely based on divergence; always wait for a “confirmation” of the price through a break of the VWMA line to ensure a change in trend.
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