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Divergence Indicator

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y09ster
121
y09ster  

Hi all,

I am looking for an Indicator with show Divergence on the macd version i attach below , with a sound alert signal. Can any one programer help out please.

Thank you.

Files:
mymacd.mq4 4 kb
increase
1199
increase  

Try this Don't expect much I am no programmer, I put my second try here

Files:
european
479
european  

Divergence Indicator

Anybody knows good MQ4 divergence indicators (RSI, MACD or CCI) ?

Sergey Golubev
Moderator
99725
Sergey Golubev  

Some information about divergence which I found in book: "Achelis, Technical Analysis from A to Z".

Divergences.

A divergence occurs when the trend of a security's price

doesn't agree with the trend of an indicator.

Many of the examples in subsequent chapters (see page )

demonstrate divergences.

The chart in Figure 34 shows a divergence between Whirlpool

and its 14-day CCI (Commodity Channel Index). [See page .]

Whirlpool's prices were making new highs while the CCI

was failing to make new highs. When divergences occur,

prices usually change direction to confirm the trend

of the indicator as shown in Figure 34. This occurs

because indicators are better at gauging price trends

than the prices themselves.

MACD.

A indication that an end to the current trend may be

near occurs when the MACD diverges from the security.

A bearish divergence occurs when the MACD is making

new lows while prices fail to reach new lows. A bullish

divergence occurs when the MACD is making new highs

while prices fail to reach new highs. Both of these

divergences are most significant when they occur

at relatively overbought/oversold levels.

Money Flow Index.

Look for divergence between the indicator and the price action.

If the price trends higher and the MFI trends lower (or vice versa),

a reversal may be imminent.

Accumulation/Distribution.

Divergences between the Accumulation/Distribution and

the security's price imply a change is imminent.

When a divergence does occur, prices usually change

to confirm the Accumulation/Distribution. For example,

if the indicator is moving up and the security's price is

going down, prices will probably reverse.

ATR.

The Average True Range ("ATR") is a measure of volatility.

The Average True Range can be interpreted using

the same techniques that are used with the other

volatility indicators. Refer to the discussion on

Standard Deviation for additional information on

volatility interpretation.

CCI.

(was developed by Donald Lambert)

A divergence occurs when the security's prices are

making new highs while the CCI is failing to surpass its

previous highs. This classic divergence is usually

followed by a correction in the security's price.

Momentum.

The interpretation of the Momentum indicator is

identical to the interpretation of the Price ROC.

Both indicators display the rate-of-change of a security's price.

However, the Price ROC indicator displays

the rate-of-change as a percentage whereas

the Momentum indicator displays the rate-of-change as a ratio.

As a market peaks, the Momentum indicator will climb sharply

and then fall off-- diverging from the continued upward or sideways movement of the price. Similarly, at a market bottom,

Momentum will drop sharply and then begin to climb

well ahead of prices. Both of these situations result in

divergences between the indicator and prices.

Relative Strength Index.

The Relative Strength Index ("RSI") is a popular oscillator.

It was first introduced by Welles Wilder in an article in

Commodities (now known as Futures) Magazine in June, 1978.

Step-by-step instructions on calculating and interpreting

the RSI are also provided in Mr. Wilder's book, New Concepts in Technical Trading Systems.

The RSI is a price-following oscillator that ranges

between 0 and 100. A popular method of analyzing

the RSI is to look for a divergence in which the security is

making a new high, but the RSI is failing to surpass its previous high.

This divergence is an indication of an impending reversal.

When the RSI then turns down and falls below

its most recent trough, it is said to have completed

a "failure swing." The failure swing is considered

a confirmation of the impending reversal.

As discussed above, divergences occur when

the price makes a new high (or low) that is not confirmed

by a new high (or low) in the RSI. Prices usually correct

and move in the direction of the RSI.

Stochastic Oscillator.

Sto.chas.tic (sto kas'tik) adj. 2. Math. designating a process

having an infinite progression of jointly distributed random variables.

Look for divergences. For example, where prices are making

a series of new highs and the Stochastic Oscillator is failing

to surpass its previous highs.

TRIX.

TRIX is a momentum indicator that displays the percent

rate-of-change of a triple exponentially smoothed

moving average of the security's closing price.

Divergences between the security and the TRIX can

also help identify turning points.
Sergey Golubev
Moderator
99725
Sergey Golubev  

And some book is good as well:

Momentum, Direction and Divergence by William Blau.

Sergey Golubev
Moderator
99725
Sergey Golubev  

Not everybody knows what the MACD is.

From: Float Analysis Powerful Technical Indicators Using Price and Volume by Steve Woods.

MACD lines (moving average convergence divergence lines) -

a technical stock indicator that uses a fast and

a slowmoving average to determine when price

up-trends and down-trends are beginning and ending.
et_phonehome_2
1387
et_phonehome_2  

ND,

Nice summary....

billworld2
47
billworld2  
european:
Anybody knows good MQ4 divergence indicators (RSI, MACD or CCI) ?

I searched a lot and never found one for MT4. None of the ones referenced by others in this thread really does the job. So, I developed strict rules and hired a programmer to build one for me. It's still being worked on, but, the results so far are encouraging. See the attached screen shot for two awesome divergence trades today.

I prefer CCI as it tends to deliver cleaner and quicker signals. Of course, it delivers false ones as well, but, that's where having clear exit rules helps.

I suppose if there were a few people willing to contribute toward my cost for getting this thing developed (which currently is $500), I'd consider making it available to the community along with my rules.

Of course, after the indicator is complete, work will begin on the EA which is also based on a very strict set of rules. Divulging that would take a bit more coaxing!

Cheers

Bill

Files:
drg00dvibe
589
drg00dvibe  

Bill, now that's exactly how a divergence indicator should be! I'd be willing to donate to a fund to release that puppy to the community..

Though, I wish it could be possible that the divergence indicator could use any indicator to plot divergences..

billworld2
47
billworld2  
drgoodvibe:
Bill, now that's exactly how a divergence indicator should be! I'd be willing to donate to a fund to release that puppy to the community.. Though, I wish it could be possible that the divergence indicator could use any indicator to plot divergences..

I agree. I specifically requested the programmer make it easy to insert other oscillators, although, the first version won't have direct support for other oscillators. I gather that once I get my hands on the code that part should be easy to handle.