divergence spotting: stochastics, rsi, cci?

hybrid

Member
58 1
Which is the best of these three for spotting divergence on daily charts?

....or is it a much of a muchness?

I don't want many indicators on my screen as I'm more price action orientated with EMAs and trendlines......so seek to choose one of these three.

thank you for any advice.
 

NVP

Legendary member
37,758 2,100
Which is the best of these three for spotting divergence on daily charts?

....or is it a much of a muchness?

I don't want many indicators on my screen as I'm more price action orientated with EMAs and trendlines......so seek to choose one of these three.

thank you for any advice.

most indicators do pretty much the same thing in reality...if you must use one then pick one, find some settings you like and then learn it inside out and back to front over the years........you should then be ok

N
 

timsk

Legendary member
7,600 2,374
Which is the best of these three for spotting divergence on daily charts?
Hi hybrid (again),
All three will show divergence with price. However, given their differences in calculation and the multitude of settings that you can apply to each one, they may show divergence at different times or at the same time but to different degrees. Which indicator - if any - is the best one for you - only you can decide. To do that, understand the basics of TA and technical indicators in particular. This Sticky will get you started: Essentials Of Technical Analysis

Thereafter, really get to grips with the nitty gritty of each indicator: how it's constructed, its strengths, its weaknesses and the conditions when its likely to mislead you. You'll find an excellent explanation of all three here: Technical Indicators & Overlays Lastly, look to see how other traders use indicators. Oddly, most (but not all) use them to 'indicate' when to enter a trade, but tend not to use them as an indication of when to exit a trade.
Tim.
 

Vicorka

Active member
246 7
Which is the best of these three for spotting divergence on daily charts?

....or is it a much of a muchness?

I don't want many indicators on my screen as I'm more price action orientated with EMAs and trendlines......so seek to choose one of these three.

thank you for any advice.

May depend on volatility of your stock. Plot all three indicators and scroll charts back in history to see which one delivered better result in the past
 

NVP

Legendary member
37,758 2,100
read Blau.....hes excellent on momentum based indicators
 

timsk

Legendary member
7,600 2,374
read Blau.....hes excellent on momentum based indicators
Hi NVP,
Full (book?) title and author's name - ideally with a link to an online retailer - would be useful!!!
;)
Tim.
 

Purple Brain

Experienced member
1,613 179
I suspect NVP is referring to Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis - William Blau.

Sorry to answer a question posed to NVP, but it is very current for me. I wouldn't want to put anyone off reading it, but I read it a while back and the basic principles didn't stick well enough for me to realise I've only just got back to those very same basics within the last few days while attempting to re-write my trading plan.

The book is in my opinion a little pricey for what is basically the use of double smoothed averages and alternate interpretations of these averages as derivations to cover strength, momentum, divergence and direction.

All of which I believe you get from the simple moving average all by itself.
 

Hate2Lose

Active member
155 3
Which is the best of these three for spotting divergence on daily charts?

....or is it a much of a muchness?

I don't want many indicators on my screen as I'm more price action orientated with EMAs and trendlines......so seek to choose one of these three.

thank you for any advice.

Unfortunately there is no right and wrong answer. It’s down to what you like and learn to trust over time. If everyone used the same indicators, there would be few opportunities available as they would be priced out too quickly. The wealth of indicators available and people’s differing preferences means interpretation can vary which keeps markets moving and maintains opportunities for profits. Try using all three for a while and if two of them keep giving the same signal you can choose which one to drop. I like RSI vs Stochastics for divergence, but I prefer Stochastics vs RSI for overbought/oversold.
 

NVP

Legendary member
37,758 2,100
I suspect NVP is referring to Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis - William Blau.

Sorry to answer a question posed to NVP, but it is very current for me. I wouldn't want to put anyone off reading it, but I read it a while back and the basic principles didn't stick well enough for me to realise I've only just got back to those very same basics within the last few days while attempting to re-write my trading plan.

The book is in my opinion a little pricey for what is basically the use of double smoothed averages and alternate interpretations of these averages as derivations to cover strength, momentum, divergence and direction.

All of which I believe you get from the simple moving average all by itself.

its a tough read ............but Jedster loves it ....;)
 
 
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