Methods to Detect Divergences

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 = ROC( C, 5 ) > 0 ; // 5 day rate of change of MACD histogramMacdUP = ROC( MACD() - Signal(), 5 ) > 0; BullishDiv = NOT PriceUP AND MACDUp;BearishDiv = PriceUP AND NOT MACDUp;Filter = BullishDiv OR BearishDiv;AddColumn( BullishDiv, "Bullish Divergence", 1.0,
       colorDefault, IIf(BullishDiv, colorGreen, colorDefault ) );
AddColumn( BearishDiv , "Bearish Divergence", 1.0,
       colorDefault, IIf(BearishDiv , colorRed, colorDefault) );



2. Using linear regression  

// 10 day linear regression slope of closePriceUp = LinRegSlope( C, 10 ) > 0 ; // 10 day linear regression slope of MACD histogramMacdUP = LinRegSlope( MACD() - Signal(), 10 ); 


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