1 Methods to Detect Divergences

| Saturday, 8 June 2013

Divergences are a bit difficult to programme. Divergences are best checked visually.

There are many different ways to check for divergences.

1. One of the simplest is to use Rate of change indicator and EXPLORATION feature of Automatic Analysis window.

// 5 day rate of change of closePriceUp ROCC) > // 5 day rate of change of MACD histogramMacdUP ROCMACD() - Signal(), ) > 0BullishDiv NOT PriceUP AND MACDUp;BearishDiv PriceUP AND NOT MACDUp;Filter BullishDiv OR BearishDiv;AddColumnBullishDiv"Bullish Divergence"1.0,
       
colorDefaultIIf(BullishDivcolorGreencolorDefault ) );
AddColumn
BearishDiv "Bearish Divergence"1.0,
       
colorDefaultIIf(BearishDiv colorRedcolorDefault) );



2. Using linear regression  

// 10 day linear regression slope of closePriceUp LinRegSlopeC10 ) > // 10 day linear regression slope of MACD histogramMacdUP LinRegSlopeMACD() - Signal(), 10 ); 


The divergences can be applied to any oscillators for any specific values. 

1 comments :

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