One of the few leading methods of forecasting.
In fact, divergence is a multidirectional movement of price and some indicator.
There are several important points.
For simplicity, I do not distinguish between divergence and convergence (convergence / divergence). Much more important is where to look. We are looking for diversions for sale in extremes of the chart for highs of bars, respectively, for purchase - in lows.
At the points of the extremum of the graph, we compare the changes in the price of the high extremum with the price of the previous extremum or even a more distant extremum. At the same points we look and compare the indicator values. If there is a convergence / divergence in the direction of movement, then we have a divergence and a signal.
The second important point is what to compare with. Most traders are looking for a diver regarding price and derivative price (for example, stochastic, RSI, MACD).
But this turns out to be a study of only one price. If you look for diversions, for example prices and volume deltas, the result will be better. In this case, you do not need to select a period and other indicator parameters (subjectively and intuitively). The market gives all the data; the trader does not affect the result. Or for example, you can compare changes in the price of a stock and changes in some index that this stock is in. It all depends on the correct selection of components and their correlation.
Over the past 3-4 years, Nasdaq calculates about 45,000 different indices.
Access to this data is expensive. They probably know something))).
Example - indicator
JPYUSD_1D_Predict indicator improved (hit 95%)
Or a search for open interest. For forex trading, it makes sense to find on one site (not advertising! My forex book) the distribution of longs / shorts.
If you find a good programmer - contact me -
As a conclusion, knowledge determines the results of trading.
All good)))
In fact, divergence is a multidirectional movement of price and some indicator.
There are several important points.
For simplicity, I do not distinguish between divergence and convergence (convergence / divergence). Much more important is where to look. We are looking for diversions for sale in extremes of the chart for highs of bars, respectively, for purchase - in lows.
At the points of the extremum of the graph, we compare the changes in the price of the high extremum with the price of the previous extremum or even a more distant extremum. At the same points we look and compare the indicator values. If there is a convergence / divergence in the direction of movement, then we have a divergence and a signal.
The second important point is what to compare with. Most traders are looking for a diver regarding price and derivative price (for example, stochastic, RSI, MACD).
But this turns out to be a study of only one price. If you look for diversions, for example prices and volume deltas, the result will be better. In this case, you do not need to select a period and other indicator parameters (subjectively and intuitively). The market gives all the data; the trader does not affect the result. Or for example, you can compare changes in the price of a stock and changes in some index that this stock is in. It all depends on the correct selection of components and their correlation.
Over the past 3-4 years, Nasdaq calculates about 45,000 different indices.
Access to this data is expensive. They probably know something))).
Example - indicator
JPYUSD_1D_Predict indicator improved (hit 95%)
Or a search for open interest. For forex trading, it makes sense to find on one site (not advertising! My forex book) the distribution of longs / shorts.
If you find a good programmer - contact me -
As a conclusion, knowledge determines the results of trading.
All good)))
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.