Experiments in Technical Analysis
- Thread starter karthikmarar
- Start date
Hi Friends
Finally here is the AFL for Trading the MACD. This can be used as a drag and drop Indicator as well as exporation. Exploration gives a list of stocks meeting the various conditions or rules we discussed like power dips, Hooks, zeroline cross over etc. Sorry Metastock Guys..I dont think it is possible to do it in MS and even if it is I do not have the requisite knowledge.
Happy Trading..
warm regards
Karthik
Finally here is the AFL for Trading the MACD. This can be used as a drag and drop Indicator as well as exporation. Exploration gives a list of stocks meeting the various conditions or rules we discussed like power dips, Hooks, zeroline cross over etc. Sorry Metastock Guys..I dont think it is possible to do it in MS and even if it is I do not have the requisite knowledge.
Happy Trading..
warm regards
Karthik
Hello Karthik,
Thanks for the enlightening thread. It has really been invaluable for newcomers like us.
Some observations ->
1) In all the examples that you have given regarding divergences, in the MACD / Histogram, to look out for bearish divergences, you have connected the peaks when the value of the MACD is above 0.
Similarly, to look out for Bullish divergences, you have connected all the peaks when then the MACD is below 0.
2) You have given us examples of divergences on the daily charts. So, should we look at weekly charts for divergences or not?
3) As a learning experience, are we seeing a bullish divergence in the stock "ARVINDMILL" as of today on the daily charts? Saw this on the histogram but not on the MACD. Also, there is no divergence on the weekly charts.
4) If there are any rules for spotting divergences, could you please educate us about the same?
Would be grateful if you could please clarify the above.
Once again, thank you very much for all the effort, pain and time that you have taken.
Regards,
Pandya
Thanks for the enlightening thread. It has really been invaluable for newcomers like us.
Some observations ->
1) In all the examples that you have given regarding divergences, in the MACD / Histogram, to look out for bearish divergences, you have connected the peaks when the value of the MACD is above 0.
Similarly, to look out for Bullish divergences, you have connected all the peaks when then the MACD is below 0.
2) You have given us examples of divergences on the daily charts. So, should we look at weekly charts for divergences or not?
3) As a learning experience, are we seeing a bullish divergence in the stock "ARVINDMILL" as of today on the daily charts? Saw this on the histogram but not on the MACD. Also, there is no divergence on the weekly charts.
4) If there are any rules for spotting divergences, could you please educate us about the same?
Would be grateful if you could please clarify the above.
Once again, thank you very much for all the effort, pain and time that you have taken.
Regards,
Pandya
Last edited:
Hi pandya
Appreciate your kind words and it is nice to know that this thread I has been useful to you..
Please note my comments on your queries..
Correct, pandya. It is only natural that a bearish divergence occurs when the stock is in a uptrend which would that MACD is positive and vice versa.
Definitely, you should look for divergence at various time frames. The divergence in a particular time frame would cause a reaction whose magnitude is related to those time frames. For example if there a bullish divergence is in daily only the reaction it causes would a bullish moves measuring days. But the same in a weekly chart would have reaction measuring in weeks. It would then mean that Divergence in weekly charts become more important than those on daily which is more important than those on hourly charts.
Sorry I missed that divergence on the Arvindmills. Many times you will see a divergence on the Histograms and not on the MACD itself. This makes Histograms more useful.
Unfortunately it is very difficult to have rules for Divergences. There are some codes for detecting divergence of MACD on the net, which I did not find very useful. I was trying out some code but still not very happy with the result. Eyeballing the charts is the best way. Keep studying the charts and soon divergences and patterns start jumping out
Regards
Karthik
Appreciate your kind words and it is nice to know that this thread I has been useful to you..
Please note my comments on your queries..
Correct, pandya. It is only natural that a bearish divergence occurs when the stock is in a uptrend which would that MACD is positive and vice versa.
Definitely, you should look for divergence at various time frames. The divergence in a particular time frame would cause a reaction whose magnitude is related to those time frames. For example if there a bullish divergence is in daily only the reaction it causes would a bullish moves measuring days. But the same in a weekly chart would have reaction measuring in weeks. It would then mean that Divergence in weekly charts become more important than those on daily which is more important than those on hourly charts.
Sorry I missed that divergence on the Arvindmills. Many times you will see a divergence on the Histograms and not on the MACD itself. This makes Histograms more useful.
Unfortunately it is very difficult to have rules for Divergences. There are some codes for detecting divergence of MACD on the net, which I did not find very useful. I was trying out some code but still not very happy with the result. Eyeballing the charts is the best way. Keep studying the charts and soon divergences and patterns start jumping out
Regards
Karthik
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