Most Indicators are of little value since they LAG the market. Standard and Hidden Divergences are the closest thing to a leading indicator I have ever found. When there is an imbalance between price and an oscillating indicator, a standard divergence warns of a direction change IN ADVANCE and a hidden divergence warns of a continuation of the underlying trend, in advance, and AT the point of pullback. Amazing!
MT4 - MetaTrader 4 Platforms with a custom MACD_Histogram Divergence Indicator Alert added allows you to scan many pairs at the same time searching for such divergences and sounds an audio .wav file when located and places an UP or Down colored direction arrow. Use ANY MT4 platform and add the free macd_histogram custom divergence indicator [ .MQ4 file listed below ] to the experts file in your program files of the trading platform -restart your platform after adding this.
The more substantial the divergence, the better the signal. Wait for a confirmation after the alert such as a MACD crossover. It works for all timeframes. Longer are better, yet fewer, but this even works on 1 min. charts for all pairs. Colored direction arrows point the way after an audio alert –FREE - http://codebase.mql4.com/3916 or FREE http://codebase.mql4.com/1115 -
The best divergences are at overbought and oversold levels, you can use RSI for this. You'll quickly get better at recognizing the strong divergences and avoiding the weaker ones. This is the MOST advanced lesson on BabyPips - their final lesson, and this indicator is the 2nd or 3rd most downloaded .MQ4 custom indicator there is.
Nick Luebcke - Trading Forex for MANY years, started on the CME. I've made EVERY mistake. This is not one of them.