RSI divergence: how often does it actually lead to reversals?

[FXS London Scalper]

An RSI divergence, in which price sets a fresh high but RSI does not, is often described as a reversal signal. In strong trends, divergences can appear many times before any reversal happens, which makes them unreliable on their own.

A method to measure: define divergence precisely, such as a higher price high with a lower RSI high within 20 bars, and record what happens over the next 10 or 20 bars. Count how often price reverses by a meaningful amount compared with continuing.

A hypothetical result might show that divergence alone is close to a coin flip, but divergence at a higher-timeframe level performs better. The point of testing is to find out which combinations, if any, add value.

Automating the detection in code helps avoid subjective marking, which tends to remember the successful examples and forget the failures.

Divergence may be more useful as a warning to tighten stops than as an entry signal.

Have you tested divergence systematically?