Hello guys, Years ago I used to use this divergence indicator that I learned from another trader. Basically this "indicator" was a line that diverged in the opposite direction of price. I'm pretty sure I used this indicator on stockcharts.com. Anyway I completely forgot about this indicator and don't know what its called. Do any of you have any idea? Also what are some divergence indicators out there?
Joe Dinapoli said about divergence: "Don't use an Oscillator to price divergence as an entry technique, unless you have an excellent means of filtering it. Even for the best of Oscillators this can, and often does, spell disaster, particularly for the new participant. Price and Oscillator divergences abound, and the market continues to stop out the divergence players. Looking back in time, you're sure to find divergences that work, but when you're going forward in time, as in real trading, the accuracy of this technique just isn't there."
I agree with Mr. Dinopoli.. Nonetheless I am still interested in divergence and have seen it in use and used successfully (with other metrics)
You mean any divergence indicator in the last 30 years of TA. Could be peak-to-trough RSI, or any other peak-to-trough indicator in that class.
Have you had a look at Elders Force Index yet. Can be used for multiple things and divergence is one of them.
divergence is over rated.....if there is divergence all it means is that the present move is weaker than the previous move. it means the whole move is weakening. this may be off topic and if it is... I am sorry...….ignore in that case
Padu, that's exactly the point of divergence.. its supposed to show diverging lines. Price is going down but the divergence line is might new lows and new highs.. This shows weakness, yes yes,
I wouldn't know, I don't trade stocks yet.. You can easily get the code online, if stockcharts allows you to create custom indicators. Its worth looking into, Alexander Elder is a pretty smart guy.