New article A New Approach to Interpreting Classical and Hidden Divergence has been published:
The article considers the classical method for divergence construction and provides an additional divergence interpretation method. A trading strategy was developed based on this new interpretation method. This strategy is also described in the article.
In this figure, we can clearly see the upward market, but MACD
has formed a new low, which is not confirmed by the price chart. This
discrepancy hints at the presence of a hidden bullish divergence and
indicates the strengthening of uptrend.
Author: Alexander Lasygin
Thanks very much for this article. Is there any way that anyone can code the indicator for mq4 ?
There is a basic version for MT 4. It differs from the one described in the article because it is based on Accelerator and FTLM. For the article, at the request of the moderator, a replacement was made.
I like the New Approach you have taken using the AO indicator. I am a big fan of OBV and volume generally. I am looking for something like your new approach to supplement my Wyckoff trading.
Does the “New Approach” also work with OBV, i have done a bit of checking on past data but cant seem to get it to work. Let me know if you have had success and i will persevere.
Your article is very well written, like your style.
Hi Paul. I am also very interested in volumes. In my opinion, this is one of the main drivers of the market. I am familiar with the OBV indicator. Experimenting with it. In this approach, it gives a lot of false signals. I would prefer it a smoothed Money Flow Index.
Hi Alex, apologies for reply delay, i have been away.
There is a variant of OBV called Gadi_obv (attached) which is supposed to give better "signals" but not so sure, i keep both and "Accumulation/Distribution [AD]" indicator on my MT4 but find the basic OBV to be best. AD, whilst you would expect it to be more accurate i find to be way off, but if all three in same direction odds are better.
OBV i find to be good at confirming a top. Once you hit a price peak then reverse and on to another price peak, if OBV does not match the prior peak there is a good chance of a reversal