Download RSI, MACD, CCI divergence indicators for Metatrader 4:
How to install RSI, MACD, CCI divergence indicators in Metatrader 4First, download Indicator files When you finish downloading files, go to download folder and unpack your indicator. Now copy files Go to your Metatrader platform. Click File in the upper menu and select Open data folder. You should see a folder like this: Can you spot the MQL4 folder? Open it and here you will find folders like: Go to Indicators folder. Now go back to your Downloads folder. Open MQL4/indicators folder and copy file: Paste them into Metatrader MQL4/indicators folder Time to Refresh/Restarts It is best to restart the Metatrader4 platform. You can also click refresh. To do that, go to Navigator, right-click Indicators menu and select Refresh. Add Indicator to the chart Now it is time to add indictor to the chart. The easiest way is to open navigator, go to Indicators and double click name of indicator you want to add:
What’s inside the package?
Inside you will find divergence indicators for the most popular oscillators:
- divergence for RSI – indicator
- divergence for MACD – indicator
- divergence for CCI – indicator
What are divergence indicators?
These are indicators that indicate divergence on the chart. Divergence takes place when the chart and the oscillator move in different directions. For example, the price rises to new peaks and at the same time the oscillator goes down.
What does divergence mean? How to use it?
Divergence means that the current trend ends and a price move in the other direction is possible.
If you see a divergence you can use it in two ways:
- if you have an open, profitable position then prepare to close it and take a profit
- if you are looking for an opportunity to open a position, divergence can be a good place to open a position in the opposite direction
What to pay attention to when analyzing divergence?
There are a few things to remember if you are trading with the help of divergence.
Divergence is not a signal to open a trade. It can be prolonged in time. What does it mean? For example, on a daily chart you see a divergence forming. The price is rising, but the RSI oscillator has started to fall. This situation takes place over the next 10 days – the price rises, the oscillator falls. It is only on the 11th day that the price breaks down and the drops start.
That is why it is worth having an additional confirmation – a signal to open a position in a given direction.
Never make a decision to open a position on the basis of divergence alone! Not every divergence ends in a change of direction. There are situations when the trend loses its strength, divergence appears, but after a while there is another impulse to continue the previous trend.
You can combine divergence with support and resistance analysis. If you see that divergence appears near an important support or resistance, this increases the chance that there might be a move in opposite direction.
Few words about time frames. You will find divergence at every time frame – from low as 1m, 5m to high as daily, weekly, monthly. The higher the time frame the more important the divergence is. For example, after a divergence from the daily chart you may see a complete change of trend direction.
How to take positions with the help of divergence?
First of all, do not base your position on the divergence itself. You should have a system to confirm when there are conditions to open a position. I personally recommend using trend lines. Divergence can form for a long time. Find the trend line that has been created during that time. After breaking it there is usually a good time to open a position.
You can also use oscillators, e.g. a level 0 break on MACD or CCI.
Which oscillators should I use when looking for divergence?
Divergence is a universal thing – you simply need an oscillator and a price chart. You can basically use most oscillators here. The most popular ones are MACD, RSI.
The first oscillator I recommend for divergence is RSI. It works very well in different markets, at different times. What I like to do is to reduce the RSI periods from the standard 14 to 7 or 9. This will give me more indications of divergence, some of them will be false, but that’s why I have the signal and trading strategy. RSI works well on Forex, commodities and stocks.
The second oscillator that I recommend is MACD. Especially if you trade on stock markets. Divergence on MACD is especially effective on higher time frames (H4, daily etc.). And these are mostly used in stock trading. You can use the MACD with standard settings 12, 26, 9 or check your favorite settings in combination with divergence.
The most common questions about divergence indicators – FAQ
How to use the divergence in Metatrader 4?
By default there are no divergence indicators built in here. However you can download them for free from my blog and install them in Metatrader 4.
What is divergence?
It is a situation when the price continues to move in one direction and the oscillator changes direction and moves in the opposite direction. For example, the price has been rising for several weeks, similarly to RSI, but at some point RSI changes direction and moves down.
Which oscillators can I use?
The most popular ones. Recommended are RSI, MACD, CCI. In this order.
What can I use divergence in trading for?
For two things. First of all, divergence is a signal about the possible end of a movement. If you have an open position you can take profits. The second is when you are looking for an opportunity to open a position. Then when a divergence occurs you open the position after signal to entry.
More about RSI, MACD, CCI divergence indicators, how to trade with divergence
For the first time ever Chris Mathis has a free demo trading account at Admiral Markets UK Ltd. You can practice your divergence trading skills on the open market using Admiral’s free trading platform.
Divergence trading is very valuable when you can just do things like that and identify the top and bottom of the market. It also helps you improve your trading techniques and like any other support / resistance strategy can be used to give your analytical skills the boost they need to make you a very profitable trader. You will see how convenient this may be and how effectively it will fill your dealer arsenal. I appreciate that you invest time and effort to develop and to ensure that you know exactly how to trade the foreign exchange markets from the edge. Become the best trader ever and become the top trader yourself with this free demo trading account at Admiral Markets UK Ltd.
Now that you understand what RSI divergence is, let’s take a look at a few ways to optimize your divergence trading strategy. This is actually the basic signaling strategy and it is the one strategy I use when I trade divergence on Urban Forex.
Divergence in foreign exchange trading around the world is divergence, and the differentiation between this type of divergence is based on the following principle. Divergence means that we can say that there is divergence when the price oscillator indicators do not match and diverge. In this situation, the price effect of the oscillators is not the only indicator on which currency traders apply the divergence forex trading strategy, as there is divergence in all forex trading areas worldwide. If the change in the forex indicator is more positive than the price changes, it is penetrated as an indicator of bullish divergence and vice versa.
This means you usually get less wrong signals and traders commit murder by learning how to structure their businesses. There is no doubt that divergence transactions have the potential to work very well over the long term – even in a low-risk environment. This is because they have a much lower risk of failure than other types of trade strategies.
This book will, however, focus on the use (and trade in) divergence, using a combination of theory and practical applications of divergence in the trade of currencies and commodities. So, after you have learned the theory and practical application of divergences, you can make the most of the possibilities available to you to learn about them.
To successfully deal with currency divergences, you need to know how to distinguish between different types of divergences in the market. In this article, we will go through a Forex RSI divergence strategy to trade all three types of divergence as well as some of the practical applications of each of these strategies.
One of the all-too-common mistakes many new traders make when learning how to trade divergences is that as soon as they notice divergence, they stop trading as soon as it appears. The same thing happens in divergence trading: most traders use an entry trigger and jump in and out of a trading position the moment they see divergence.
At its most basic level, divergence is a forex pair that you observe and an indicator that you have on your chart. If the price reaches a low or high value, the indicator (representing divergence in foreign exchange trading) should follow with the trade of the indicator. One of the main reasons for its popularity is that it is the main indicator and can lead to price movements that are reversed. If prices are moving in a negative relationship to the indicators, for example, you should leave your trading position.
Forex divergence is defined as the difference between the price of an asset that is in a positive or negative relationship with the indicators of the foreign exchange market, or in the opposite direction to the actual price.
The classic regular divergence in foreign exchange trading is a situation in which the price action reaches a higher, lower or lower low, but does not do so while it is in the phase of correction or consolidation. A hidden bullidity is when a correction occurs during the trading deviation of an uptrend and the oscillator reaches a high or higher value, but does not do so while remaining within the phases of reaction and consolidation, or a combination of both. Hidden bear deviations are when the correction occurs during a downward trend and a lower or lower value is hit by the escullator while it is doing the same. The classic regular divergence in Forex trading is the situation where the price effect reaches higher highs, lows or lows without oscillators doing so.
The above shows how important it is to understand the concept of divergence and make the right decisions when it comes to foreign exchange trading. RSI Divergence is a powerful concept for foreign exchange trading, and if you know how to do it properly under market conditions with the right trading signals, you can create powerful trading systems that help you achieve consistency of profits month after month.
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