Short answer: no. Across 96 versions on every chart from 1-minute to weekly, none passed our bar. Win rates ranged from 38.4% (25,722 trades) to 58.4% (329 trades).
Read this first, what this test can and cannot tell you
- Gold only (XAUUSD), Deriv's price feed and chart candles on the UTC clock, January 2017 to September 2026 (9 years 8 months). Brokers on a different clock draw different 4-hour and daily candles; Deriv's daily chart includes a short Sunday candle.
- One precise, written definition of the concept. Your own version may differ, the exact rules are below so you can check.
- Every trade pays the broker's spread (at least 15 points, measured from real ticks). The spread around the daily reopen is wider than that, which makes results look slightly better, not worse.
- "Average per trade" is in basis points: 1 bp = 0.01% of the price (about $0.43 per 1-ounce position at $4,300).
- This is a record of what one rule did on past data. It is not advice, not a signal, and not a promise about the future.
What we tested
Regular RSI divergence, modelled on the settings of TradingView's built-in RSI Divergence indicator: RSI 14; turning points on the RSI with 5 candles each side; the previous turning point 5 to 60 candles back. Bullish: price makes a lower low while RSI makes a higher low → buy at the next candle's open. Bearish: price makes a higher high while RSI makes a lower high → sell. Also tested with an "extreme" filter (RSI below 30 / above 70 at the first point). Exits after 4, 12 or 24 candles. Charts: M1, M5, M15, M30, H1, H4, D1, W1.
Results by chart (default settings, exit after 12 candles)
| Chart | Direction | Trades | Win rate | Average per trade (bp, after spread) | Verdict |
|---|---|---|---|---|---|
| M1 | bullish → buy | 21848 | 44.2% | -0.87 | no edge (not significant) |
| M1 | bearish → sell | 23660 | 43.7% | -0.89 | no edge (not significant) |
| M5 | bullish → buy | 4243 | 48.1% | -0.45 | no edge (not significant) |
| M5 | bearish → sell | 4800 | 46.7% | -1.05 | no edge (not significant) |
| M15 | bullish → buy | 1364 | 51.0% | -0.07 | no edge (not significant) |
| M15 | bearish → sell | 1591 | 46.7% | -3.47 | no edge (not significant) |
| M30 | bullish → buy | 664 | 55.1% | +2.22 | no edge (not significant) |
| M30 | bearish → sell | 804 | 50.1% | -1.05 | no edge (not significant) |
| H1 | bullish → buy | 329 | 58.4% | +3.64 | no edge (not significant) |
| H1 | bearish → sell | 454 | 45.2% | -7.43 | no edge (not significant) |
| H4 | bullish → buy | 86 | 52.3% | +27.26 | too few trades to judge |
| H4 | bearish → sell | 122 | 48.4% | +9.84 | too few trades to judge |
| D1 | bullish → buy | 10 | 60.0% | -41.66 | too few trades to judge |
| D1 | bearish → sell | 23 | 56.5% | -34.45 | too few trades to judge |
| W1 | bullish → buy | 0 | , | , | too few trades to judge |
| W1 | bearish → sell | 7 | 57.1% | -45.19 | too few trades to judge |
With a stop and a target (stop beyond the divergence, target twice the risk)
A coin-flip market reaches a 2:1 target before the stop about one time in three. That is the number to beat.
| Chart | Direction | Trades | Won (target before stop) | Chance would give | Average result (R) |
|---|---|---|---|---|---|
| M1 | buy | 21687 | 24.9% | 33.3% | -0.24 R |
| M1 | sell | 23136 | 22.4% | 33.3% | -0.32 R |
| M5 | buy | 4121 | 29.0% | 33.3% | -0.12 R |
| M5 | sell | 4660 | 27.1% | 33.3% | -0.18 R |
| M15 | buy | 1323 | 31.2% | 33.3% | -0.06 R |
| M15 | sell | 1568 | 28.5% | 33.3% | -0.15 R |
| M30 | buy | 658 | 34.9% | 33.3% | +0.06 R |
| M30 | sell | 786 | 29.6% | 33.3% | -0.11 R |
| H1 | buy | 319 | 36.9% | 33.3% | +0.11 R |
| H1 | sell | 427 | 28.9% | 33.3% | -0.13 R |
| H4 | buy | 85 | 38.8% | 33.3% | +0.16 R |
| H4 | sell | 118 | 33.6% | 33.3% | +0.01 R |
Year by year: bullish divergence, 1-hour chart, exit after 12 candles
| Year | Trades | Win rate | Average per trade (bp, after spread) |
|---|---|---|---|
| 2017 | 36 | 47% | -3.59 |
| 2018 | 35 | 51% | +0.58 |
| 2019 | 33 | 70% | +16.83 |
| 2020 | 28 | 50% | -11.11 |
| 2021 | 36 | 64% | +5.83 |
| 2022 | 46 | 59% | +7.07 |
| 2023 | 43 | 51% | -2.44 |
| 2024 | 26 | 85% | +25.61 |
| 2025 | 22 | 64% | +25.30 |
| 2026 | 24 | 50% | -24.59 |
Does the divergence itself add anything?
We compared every divergence with the same setup where price made the new extreme but RSI did not diverge. From the 15-minute to the 1-hour chart the difference was not significant. On the 4-hour chart bullish divergence did better (+23.1 bp, t +2.63), but on only 92 trades and as one of 24 comparisons, a lead worth watching, not a finding.
How we tested
- The rules were written down and dated before the test ran; nothing was tuned afterwards.
- Signals use closed candles only; every entry is at the next candle's open. One trade at a time per version; a crossing signal that arrives while a trade is open is skipped.
- Many versions were tried, so the bar for "real" is raised to match (Bonferroni, two-sided 5%), and a result must also hold in at least 70% of years, in both halves of the sample, and beat gold's own rise over the same years.
- The same test runs on a random price series. If the random series "passes", the whole test is thrown out, and we say so. Random-series check for this test: clean (strongest random result t 3.74, on 13 trades, below the 250-trade minimum).
Think we got it wrong? Show us. Send your rules, your data source and your result (form fields: your definition · timeframe · data source and dates · costs you charged · your result and sample size · a link or file). If your test holds up, we publish the correction on this page, dated, with your name if you want it.