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Price/CCI Divergence Indicator

  • Post #1
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  • First Post: Dec 10, 2006 12:56pm Dec 10, 2006 12:56pm
I know price/indicator divergence indicators are available on platforms such as TradeStation and Trade Navigator. However, I'm looking for a reliable price divergence indicator for Metatrader 4.

Specifically, I'd like to track divergence between price and CCI. One scenario is represented in the attached chart showing examples on GBPUSD M15. Here I'm looking at what Elder refers to as type A divergence when price and the indicator have opposing peaks/valleys.

Is anyone aware of a decent divergence indicator for MT4? Coding one myself is currently a little bit beyond my programming capabilities.

Once I get and adapt the indicator, I'd be happy to start a thread in the Trading Systems section discussing in detail rules for this system.

Thanks in advance for any pointers regarding said indicator.

Cheers

Bill
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New to divergence was wondering if anybody can give some in put. I see divergence on the 4hr jpy/usd
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On the daily no divergent but is coming to an area that has had some resistence to it
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This is on the 4hr chart showing divergence and a 287 pip drop over a few days. Is the above 4hrs chart for the Jpy/Usd "predicting" a similar drop? Or atleast a drop of some type? Notice another 4hr divergence too is the Gbp/Chf ready to drop again.
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Here same chart Gbp/Chf on the daily no divergence. Any in put or comments is appreciated.
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Quoting goodthings
Here same chart Gbp/Chf on the daily no divergence. Any in put or comments is appreciated.
There's not a lot of input required here. It was never a divergence setup in the first place, so you don't trade it. If you worry about all the trades your system doesn't catch, you'll go nuts. You can be fabulously rich grabbing a small piece of the pie consistently, don't get too greedy.

That being said, divergences should only be one lure in your tackle box, you see what I'm sayin?
your saying do divergence on the 4hr chart



Quoting Far From Average
There's not a lot of input required here. It was never a divergence setup in the first place, so you don't trade it. If you worry about all the trades your system doesn't catch, you'll go nuts. You can be fabulously rich grabbing a small piece of the pie consistently, don't get too greedy.

That being said, divergences should only be one lure in your tackle box, you see what I'm sayin?
Once again getting some divergence signals from the gbp/chf
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Here is a weekly pin that goes with the divergence signals.
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I think you may have just run up against a phenomenon which I have encountered in the system I have just been setting up. That is that the system works fabulously well using one timeframe for a given pair (each pair seems to have an ideal timeframe), but not necessarily using others. In fact, it is an excellent losing system at some timeframes--gets you into all the bad trades and is not very good at getting you into the good ones.

I do not use OsMA, nor does my system use divergence, although it is an attractive idea (but would not integrate into my system), but looking at your data, if I were you I would investigate whether the 4H timeframe were not the best one for you to use for this pair. I say this based on what occurred after the divergence seen on the 4H chart. You may find that the divergence on the 4H chart is consistently good at signaling a move. It would be worth looking into and at least back testing.
I have used the CCI Divergence for trades and here are my thoughts:

1. On shorter time frames such as the 1min, 5min, 15min, it is very easy to get whipsawed as in such a smaller time frame looks to capture small moves that may just be minor retracements. The risk/reward in a shorter time frame may not be justifible for a worth while trade. Often times it could be though.

2. On longer time frames, it logically does have more merit

remember that divegence is fighting against the trend, and that alone can be very dangerous. However, at the same time, it can be very profitable. My idea is to go with the trend, and use the CCI divergence as a gauge to when a trend may be over.
hi all,

IMHO,

when price make a certain high/low then it make another high/low & at the same time oscillator show the divergence (opposite direction) so u can trade it. But, u get caught when price going to make another high/low.

the most important things is to tighten yur money management & try to sniff with another indicator wether the divergence is the valid one or not. So to trade the divergence itself maybe not enough.

maybe we can u additional approach with it such as trade the divergence + oscillator trendline brake.

just my 2 cent.

regards.
candlepower
Appreciate the thought. I saw divergence on the 4h usd jpy a while back. It never did develop that the divergence would indiate.
Quoting Trader1580
I have used the CCI Divergence for trades and here are my thoughts:

1. On shorter time frames such as the 1min, 5min, 15min, it is very easy to get whipsawed as in such a smaller time frame looks to capture small moves that may just be minor retracements. The risk/reward in a shorter time frame may not be justifible for a worth while trade. Often times it could be though.

2. On longer time frames, it logically does have more merit

remember that divegence is fighting against the trend, and that alone can be very dangerous. However, at the same time, it can be very profitable. My idea is to go with the trend, and use the CCI divergence as a gauge to when a trend may be over.
Appreciate the thought. I saw divergence on the 4h usd jpy a while back. It never did develop that the divergence would indiate. Back testing is a good way to confirm it.



Quoting moonchild
I think you may have just run up against a phenomenon which I have encountered in the system I have just been setting up. That is that the system works fabulously well using one timeframe for a given pair (each pair seems to have an ideal timeframe), but not necessarily using others. In fact, it is an excellent losing system at some timeframes--gets you into all the bad trades and is not very good at getting you into the good ones.

I do not use OsMA, nor does my system use divergence, although it is an attractive idea (but would not integrate into my system), but looking at your data, if I were you I would investigate whether the 4H timeframe were not the best one for you to use for this pair. I say this based on what occurred after the divergence seen on the 4H chart. You may find that the divergence on the 4H chart is consistently good at signaling a move. It would be worth looking into and at least back testing.
  • Post #15
  • Quote
  • Last Post: Dec 30, 2006 10:35pm Dec 30, 2006 10:35pm
Been looking at this for a couple of weeks did trade it when their was a double botton on the dailys a while back and made some pips. Pulled out around 3820 or so. Thought it was topping out.
[QUOTE=CandlePower]hi all,

IMHO,

when price make a certain high/low then it make another high/low & at the same time oscillator show the divergence (opposite direction) so u can trade it. But, u get caught when price going to make another high/low.

the most important things is to tighten yur money management & try to sniff with another indicator wether the divergence is the valid one or not. So to trade the divergence itself maybe not enough.

maybe we can u additional approach with it such as trade the divergence + oscillator trendline brake.

just my 2 cent.

regards.
candlepower[/quote]
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