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Divergence and hidden Divergence 115 replies

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Best divergence indicator?

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  • Post #1
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  • First Post: Mar 20, 2007 6:15pm Mar 20, 2007 6:15pm
  •  Ted1983
  • | Joined Oct 2006 | Status: Britunculus | 940 Posts
Hi,

I would like to hear peoples opinions on the best indicator for divergence on the daily charts. I have been looking into the use of Money Flow Index for this, aswell as for overbought/sold levels. Any input would be appreciated!
  • Post #2
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  • Mar 20, 2007 6:49pm Mar 20, 2007 6:49pm
  •  Leugimp
  • | Joined Dec 2006 | Status: Member | 1,385 Posts
Quoting Ted1983
Disliked
Hi,

I would like to hear peoples opinions on the best indicator for divergence on the daily charts. I have been looking into the use of Money Flow Index for this, aswell as for overbought/sold levels. Any input would be appreciated!
Ignored

Divergence is tricky because it comes in markets that are trending and indicators tend to diverge for long periods of time. As far as indicator selection goes, it is all very personal. I like to use RSI as it has stood the test of time for me, however i will rarely trade in the direction of the divergence unless many other factors line up including time cycles. I rather look to fade these divergence signals at appropriate retracement levels coupled with positive or negative reverse divergence signals thaqt go with the original trend.

One option if you are looking to trade in the direction of the divergence is to look for divergence signals on higher timeframes and then drop down in timeframe for entry in direction of divergence once lower timeframe is showing a trend in that direction. Just know that you are trading against the larger trend and make sure to respect stop levels and keep leverage at an appropriate level.

Just an opinion
Man who scratches ass should not bite fingernails
  • Post #3
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  • Oct 6, 2009 10:02pm Oct 6, 2009 10:02pm
  •  reese777
  • | Joined Oct 2008 | Status: Member | 27 Posts
Best I've experienced.
Attached Files
File Type: ex4 CCI_Divergence_V1.1.ex4   11 KB | 10,896 downloads
File Type: mq4 CCI_Divergence_V1.1.mq4   12 KB | 13,404 downloads
  • Post #4
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  • Aug 4, 2011 4:33pm Aug 4, 2011 4:33pm
  •  cugir321
  • | Joined Jul 2009 | Status: Member | 815 Posts
I agree with you.

Quoting reese777
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Best I've experienced.
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  • Post #5
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  • May 19, 2012 1:58pm May 19, 2012 1:58pm
  •  chirag77
  • | Joined May 2012 | Status: Junior Member | 3 Posts
I also use CCI Divergence indicator, but i use it with Stochastic Oscillator to get better buy sell signal.
  • Post #6
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  • Jul 13, 2012 3:55pm Jul 13, 2012 3:55pm
  •  erforex
  • | Commercial Member | Joined May 2011 | 152 Posts
Quoting Ted1983
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Hi,

I would like to hear peoples opinions on the best indicator for divergence on the daily charts. I have been looking into the use of Money Flow Index for this, aswell as for overbought/sold levels. Any input would be appreciated!
Ignored
I recommend you to read this article:
http://metatrader-indicators.com/201...ce-indicators/
  • Post #7
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  • Sep 20, 2012 9:54am Sep 20, 2012 9:54am
  •  200To100k
  • | Additional Username | Joined Sep 2012 | 67 Posts
For me its the common as muck MACD!

I love MACD divergence when used at price levels you already expected to hold price, the MACD divergence just helps clarify your thoughts ahead of taking the position.
  • Post #8
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  • Sep 21, 2012 4:04am Sep 21, 2012 4:04am
  •  amandatrader
  • | Joined Sep 2012 | Status: Junior Member | 4 Posts
Quoting Ted1983
Disliked
Hi,

I would like to hear peoples opinions on the best indicator for divergence on the daily charts. I have been looking into the use of Money Flow Index for this, aswell as for overbought/sold levels. Any input would be appreciated!
Ignored
MACD
  • Post #9
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  • Sep 22, 2012 6:08pm Sep 22, 2012 6:08pm
  •  pkimnyc
  • Joined Oct 2007 | Status: Sniper | 14,728 Posts
Macd, but they all do the same. just a personal preference, I guess. I find Macd is a bit easier to read. But then again... That's just me.
  • Post #10
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  • Jun 28, 2014 9:55am Jun 28, 2014 9:55am
  •  manikah
  • | Commercial Member | Joined Jun 2012 | 26 Posts
In my trading platform I always use MACD also I am satisfy about this Divergence.
  • Post #11
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  • Jun 28, 2014 10:58am Jun 28, 2014 10:58am
  •  numbnuts
  • Joined Jan 2010 | Status: overcaffeinated.... | 1,508 Posts | Invisible
Quoting Ted1983
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Hi, I would like to hear peoples opinions on the best indicator for divergence on the daily charts. I have been looking into the use of Money Flow Index for this, aswell as for overbought/sold levels. Any input would be appreciated!
Ignored
If you want to find divergent setups that actually mean something, look for divergences between price and speculative COT positioning.
Attached Image (click to enlarge)
Click to Enlarge

Name: spxcot.png
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si hoc legere scis nimium eruditionis habes
  • Post #12
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  • Jun 28, 2014 11:33am Jun 28, 2014 11:33am
  •  saticdoor86
  • | Joined Mar 2014 | Status: Member | 148 Posts
Quoting Leugimp
Disliked
{quote} Divergence is tricky because it comes in markets that are trending and indicators tend to diverge for long periods of time. As far as indicator selection goes, it is all very personal. I like to use RSI as it has stood the test of time for me, however i will rarely trade in the direction of the divergence unless many other factors line up including time cycles. I rather look to fade these divergence signals at appropriate retracement levels coupled with positive or negative reverse divergence signals thaqt go with the original trend. One...
Ignored
higher tf to lower, works like a charm most of the time!
  • Post #13
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  • Jun 28, 2014 12:08pm Jun 28, 2014 12:08pm
  •  dee50
  • Joined Jul 2010 | Status: Retired | 3,621 Posts
How effective any indicator is at showing Divergence depends on the settings you are going to use, if you are going to use default settings then you are wasting your time. The default settings were great when the indicator was invented but market dynamics have changed.

Here are 3 stalwarts, Stochastic, MACD and RSI. They are all showing the same thing, the choice you have to make is which one is easier to interpret. Do the same thing with any other indicator you are considering and you will soon see which works for you.
Attached Image (click to enlarge)
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Name: stochs macd rsi divergence.png
Size: 54 KB
Cut your Losers short and let your Winners run.
  • Post #14
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  • Jun 29, 2014 2:31am Jun 29, 2014 2:31am
  •  saticdoor86
  • | Joined Mar 2014 | Status: Member | 148 Posts
Quoting numbnuts
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{quote} If you want to find divergent setups that actually mean something, look for divergences between price and speculative COT positioning. {image}
Ignored

hi there, where can I get the COT indi??

thank you in advance
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  • Jun 29, 2014 9:58am Jun 29, 2014 9:58am
  •  numbnuts
  • Joined Jan 2010 | Status: overcaffeinated.... | 1,508 Posts | Invisible
Quoting saticdoor86
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{quote} hi there, where can I get the COT indi?? thank you in advance
Ignored
http://cotbase.com/

or

http://www.timingcharts.com/
si hoc legere scis nimium eruditionis habes
  • Post #16
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  • Jun 29, 2014 10:44am Jun 29, 2014 10:44am
  •  parsifal23
  • | Joined Aug 2012 | Status: Member | 88 Posts
My favorite is the FX5-MACD-Divergence Indi, itīs very reliable on higher time-frames and I get an audio-alert together with a text message.
Simply download it from your MT4 and apply it to the chart, or if you donīt find it there, simply google it. My very best weaon ....
  • Post #17
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  • Jun 29, 2014 3:44pm Jun 29, 2014 3:44pm
  •  justin7
  • | Joined Sep 2012 | Status: Member | 986 Posts
Quoting numbnuts
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{quote} http://cotbase.com/ or http://www.timingcharts.com/
Ignored
the COT indicator looks interesting. What is it based on if not the moving average of price? Where does it derive it's data from?
  • Post #18
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  • Jun 29, 2014 9:40pm Jun 29, 2014 9:40pm
  •  numbnuts
  • Joined Jan 2010 | Status: overcaffeinated.... | 1,508 Posts | Invisible
Quoting justin7
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{quote} the COT indicator looks interesting. What is it based on if not the moving average of price? Where does it derive it's data from?
Ignored
http://en.wikipedia.org/wiki/Commitments_of_Traders
si hoc legere scis nimium eruditionis habes
  • Post #19
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  • Jun 29, 2014 10:19pm Jun 29, 2014 10:19pm
  •  justin7
  • | Joined Sep 2012 | Status: Member | 986 Posts
Quoting numbnuts
Disliked
{quote} http://en.wikipedia.org/wiki/Commitments_of_Traders
Ignored
yes i read up it seems that this thing would be lagging though wouldn't it? since the prices it gives out are covering the preceding week and not the current one?
  • Post #20
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  • Jun 29, 2014 11:36pm Jun 29, 2014 11:36pm
  •  numbnuts
  • Joined Jan 2010 | Status: overcaffeinated.... | 1,508 Posts | Invisible
Quoting justin7
Disliked
{quote} yes i read up it seems that this thing would be lagging though wouldn't it? since the prices it gives out are covering the preceding week and not the current one?
Ignored
All technical indicators are lagging, as they are derived from price in one way or another. COT isn't a technical indicator though, it is basically the opinion of the markets biggest players - people with more brainpower than you or I, who have put considerable amounts of money where their mouth is. Large speculators on the COT charts are the smartest money in the market - and they are generally big enough collectively to drive price. When a series of higher highs isn't supported by increased large speculative positioning, somethings up. That's the only divergence I pay attention to.
si hoc legere scis nimium eruditionis habes
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