Divergence.
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)))
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