A divergence is one of the most important concepts for finding trend reversals. Since the market goes up in price swings, a decrease in momentum is a sign of reversal of uptrend. A momentum indicator such as RSI shows negative divergence when prices start losing momentum.
To find a negative divergence, we compare consecutive highs of prices with consecutive highs in RSI. If prices make a higher high but RSI makes a lower high, a negative divergence is confirmed.
Similarly the positive divergence is also calculated. The same classic divergence detection rules which are used manually, are also used by the AFL formula. We modify the custom peak and trough functions in Amibroker to avoid a future looking formula. This is an advanced code which detects divergence but without looking at future prices.Europa regular ttf
The strategy is significantly profitable in Bank Nifty current month futures. It generates a profit of points, or Rs. We leave it to the readers to suggest any improvement in Step 2 and Step 3 which can increase the profitability. We can introduce custom stoploss as well as profit targets to further maximize the profitability. Whenever you are shortlisting a Trading system, then please consider Brokerage 0.
As the slippages are the Biggest Enemy in the market, that factor has to be considered when you are designing the systems. This is my observation, so please don't take the Perfect numbers, it may vary from System 2 System. Not used any Exposure. Absolute Money.
Positional Based System.
Hi Saurabh Lohiya; how good is that if you explain more about your codes. Mohammad Hosein.Watch our video below on how to use the on balance volume study aka OBV. Volume flow is a great way to identify money moving into a stock or out of a stock. Chartists can look for divergences between the on balance volume study and price to predict price movements or use the on balance volume to confirm price trends. We teach trading live each day on our streams.
Take a look at our trading service. The OBV is a study that was developed to point out when divergence occurred between price action and volume. Granville suggested in his book that moves in volume come before moves in price. Pause here to think this through: A small candle perhaps a spinning top or long wick doji may offer a small amount of positive volume which would only move the OBV line a small distance while the candle before and the candle after may be large body and present lots of negative volume which would move the OBV on a much longer distance.
Granville noted that the on balance volume study would often move before prices. Using trend linesthese differences are easier to spot. With the OBV, volume is added or subtracted at the close of the candle so the trend lines should always be drawn against the close of the candle body, not against the wicks or the open of the candle.
These differences in direction are called divergence and before we go any further, we will look at the word divergence to get a better understanding of the meaning behind it. On Investopediathere is a great definition of divergence. What is Divergence? The divergence occurs when the stock price and volume move in opposite directions or when the price move is not as great as the volume on a chart. Divergence can be an indication of an imminent positive or negative price move.
Divergence is one of the most complex signals and one that can give less experienced investors false signals. The most common way to identify divergence with the on balance volume study is by using trendlines to distinguish when:.
Look at the on balance volume direction, not at the OBV number. Slope and direction are important, not the OBV total. Moves in volume come before moves in price.
The on balance volume study should confirm price action or point out when to ignore the current price action. By adding a few changes to the regular OBV study found in TOS, we can identify when those signals are present and snap some trend lines onto the chart for confirmation.
Take our Thinkorswim tutorial to learn how to set up an account. Look at the changes made to the on balance volume study. Next, I have added a red dot for bearish divergence and a green dot for bullish divergence.
On the green candle highlighted below, the candle closed much higher than the previous candle close while the OBV signaled a very small volume gain. This low volume confirmation signaled to the trader that new money was not supporting this higher move in price. I also have added labels and alerts which pop up when the OBV is giving signals a trader should pay attention to.On-balance volume OBV is a technical analysis indicator intended to relate price and volume in the stock market.
Total volume for each day is assigned a positive or negative value depending on prices being higher or lower that day. A higher close results in the volume for that day to get a positive value, while a lower close results in negative value.
If OBV fails to go past its previous rally high, then this is a negative divergence, suggesting a weak move. We try to maintain hiqhest possible level of service - most formulas, oscillators, indicators and systems are submitted by anonymous users. Therefore www. If you use any of this information, use it at your own risk.
You are responsible for your own trading decisions. Be sure to verify that any information you see on these pages is correct, and is applicable to your particular trade. In no case will www. Stock Portfolio Organizer The ultimate porfolio management solution. Volume Scan report Submitted by anandnst about 8 years ago. Better Volume Indicator Submitted by kaiji almost 11 years ago. Volume Color with Dynamic Limit Submitted by kaiji over 10 years ago.
Controlling Height of Volume Bars Submitted by kaiji over 10 years ago.I tested it along with my other indicators its superb.Transitivity definition aba
Here are 2 charts placed for your judgement. I am working on this chart for last once year and have been testing it and refining it. Its still in development mode. If I have to give I have to give something that works and is near to best. I have to incorporate Candles within this chart. The Candle Patterns shall be indicated on the charts. Aloha from Hawaii. It looks like the buy signal is not generated until the close of the next bar in the futureis this the case?
We try to maintain hiqhest possible level of service - most formulas, oscillators, indicators and systems are submitted by anonymous users. Therefore www. If you use any of this information, use it at your own risk.
You are responsible for your own trading decisions.
RSI Divergence Indicator – Optimized AFL code
Be sure to verify that any information you see on these pages is correct, and is applicable to your particular trade.
In no case will www. Stock Portfolio Organizer The ultimate porfolio management solution. Williams Alligator System Submitted by durgesh almost 9 years ago. Report as Spam.
Kabir about 9 years ago. Kabir jee…. Once its all complete i shall put it over here.Thea bernice kasus
Henry over 4 years ago. Dear Bro, This is good code but it has error while backtesting, scanning… Could u edit this error?Brasile 2002 rosa finale
Hi guy, Pls tell me, how to use it?Open online account with Zerodha. Forums New posts Search forums. What's new New posts New resources New profile posts Latest activity. Resources Latest reviews Search resources.
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Ajax Well-Known Member Aug 15, Ajax said:.Does anyone tested the accuracy of this trading indicator.
My System - My trades.
The Green dot in the indicator shows positive divergence and Red dot in the indicator shown negative divergence. It could a good scanner in selecting NSE stocks. And the results are shown below. Equity Curve. Max Drawdown Profit Table. Profit Distribution. Rajandran has a broad understanding of trading softwares like Amibroker, Ninjatrader, Esignal, Metastock, Motivewave, Market Analyst Optuma ,Metatrader,Tradingivew,Python and understands individual needs of traders and investors utilizing a wide range of methodologies.
I am using the optimised RSI Divergance you made. Hi Rajandran, Can you please guide us how to use this RSI to take a trade in intraday trade in 5 min time frame.
Will it be possible for you to add in the code, the buy and sell signals or get an alert whenever green or red dot appears? Thanks a lot!!!!! I agree with Mark comment, this system look into future and repainting the divergence dots.Interstate love song lyrics youtube
As per the above post I need to take the positions next day after seeing the divergence dot which is not possible. Rajendran can you please share your thoughts on this? I must say, you are awesome… Great going buddy…. Hi rajandran the above afl is working very good in EOD thanx alot for that. The equity curve is worse in this case. Am I still right? Thank you for your answer in advance.
OBV Divergence Indicator for MT4
Regards from Poland. Total execution time: 0. Approximately past and future quotes are needed to calculate the formula properly. There is repainting issue in this afl, however it is a really good tool, can you please provide a version which does not repaint and helps you making fair judgement. Hi the repainting in this case cannot be solved as some of the function used here doesnt allow to make it as non repainting. It is a very good indicator for exiting the calls but repainting is becoming a concern now, please do look into it.
I am using it for 3 min. Signals are scanned after EOD. How I can identify stocks with increasing volatility? Getting the newsfeed directly into my favorite charting software is always been interesting to me.
This curiosity arises when one of our Amibroker Mumbai Participant comes up with a simple trading strategy. However the profit table can be customized according to ones requirement.
Rather than doing a […]. Share this: Email Facebook Twitter Print. Like this: Like LoadingOn Balance Volume OBV measures buying and selling pressure as a cumulative indicator, adding volume on up days and subtracting it on down days. It was one of the first indicators to measure positive and negative volume flow.
Chartists can look for divergences between OBV and price to predict price movements or use OBV to confirm price trends. A period's volume is positive when the close is above the prior close and is negative when the close is below the prior close.How I Make $1k/Day Scalping Gold With Divergence
Volume figures were rounded off and are shown in 's. In other words, 8, really equals 8, or 8. This number is now used as the volume multiplier to compute positive or negative volume. Granville theorized that volume precedes price. OBV rises when volume on up days outpaces volume on down days.
OBV falls when volume on down days is stronger. A rising OBV reflects positive volume pressure that can lead to higher prices. Conversely, falling OBV reflects negative volume pressure that can foreshadow lower prices.
Granville noted in his research that OBV would often move before price. Expect prices to move higher if OBV is rising while prices are either flat or moving down.
Price Volume divergence explorer
Expect prices to move lower if OBV is falling while prices are either flat or moving up. The absolute value of OBV is not important. Chartists should instead focus on the characteristics of the OBV line. First, define the trend for OBV. Second, determine if the current trend matches the trend for the underlying security. Third, look for potential support or resistance levels.
Once broken, the trend for OBV will change and these breaks can be used to generate signals. Also, notice that OBV is based on closing prices. Finally, volume spikes can sometimes throw off the indicator by causing a sharp move that will require a settling period. Bullish and bearish divergence signals can be used to anticipate a trend reversal. These signals are truly based on the theory that volume precedes prices.
A bullish divergence forms when OBV moves higher or forms a higher low even as prices move lower or forge a lower low. A bearish divergence forms when OBV moves lower or forms a lower low even as prices move higher or forge a higher high.
The divergence between OBV and price should alert chartists that a price reversal could be in the making. OBV, on the other hand, held above its June low to form a bullish divergence.Senario joget toleh menoleh lirik
This was a classic case of volume leading price. Rising OBV during a trading range indicates accumulation, which is bullish.
The chart for Medtronic MDT shows a bearish divergence with volume leading price lower. The blue dotted lines identify the divergence period. Also, notice that OBV broke support during this divergence period.
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