Software packages have different strengths and weaknesses when it comes to programming. I was wondering which are some of the good software packages that are easy and accurate to program divergences? So, for instance, to programmicaly find divergence between price and RSI, etc. Thanks.
I can't really recommend you to a software package, but I would say that you can get started using Excel and VBA. Pretty simple stuff, use some "if" statements to identify important swing highs/lows in price action, and do the same for your RSI or stochastic indicator. Then just establish the divergence criterion as something like: =if (and(previous price maxima <= most recent price maxima, previous stochastic maxima > most recent stochastic maxima, "Negative Divergence Present", ("")) Just reverse the function to find positive divergences. The math for calculating stochs and RSI really isn't tough at all, and I think that everyone who uses indicator/rule based trading needs to know how to manually construct the indicators. It just helps one understand them that much more. I hope this helps.
Here the code for bearish divergence, pass this a Oscillator and it will return 1 when it finds divergence. This is code for TradersStudio. You can learn more about TradersStudio at www.TradersStudio.com '******************************************************************* 'Description: Bearish Divergence '******************************************************************** ' TradersStudio(r) copyright 2004-2007 , All rights reserved Function BearishDivergence(Price As BarArray, Oscillator As BarArray, Strength, Length) As BarArray Dim Return Dim Value1 Dim Value2 Dim Value3 Dim Value4 Dim Condition1 Dim Condition2 Return = 0 Value1 = 0 Value2 = 0 Value3 = 0 Value4 = 0 Condition1 = 0 Condition2 = 0 Value1 = -1 Value2 = -1 Value3 = -1 Value4 = -1 Return = 0 Value1 = SwingHighBar(1, Price, Strength, Length) If Value1 > -1 Then Value2 = SwingHighBar(2, Price, Strength, Length) End If If Value2 > -1 Then Value3 = SwingHighBar(1, Oscillator, Strength, Length) End If If Value3 > -1 Then Value4 = SwingHighBar(2, Oscillator, Strength, Length) End If If Value4 > -1 Then Condition1 = Price[Value1] > Price[Value2] Condition2 = Oscillator[Value3] < Oscillator[Value4] If Condition1 And Condition2 Then Return = 1 End If End If BearishDivergence = Return End Function