Divergences

Discussion in 'Newbie Questions' started by lucacrebbe, Sep 11, 2017.

  1. lucacrebbe

    lucacrebbe Trader

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    Hello can I ask you which oscillators among these 3 do you consider more reliable when it comes to divergence? RSI, CCI or On Balance Volume?

    Thank you.
     
  2. Enivid

    Enivid Administrator Staff Member

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    When it comes to Forex trading - RSI.
     
  3. lucacrebbe

    lucacrebbe Trader

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    Can I ask you why? I would yhink that it could be more useful in Stoks trasing, because it's obvious that if we are in overbought for a long time, sooner or later there will be a price decresing of the stock...
    ALso I red everywhere that indicators price based are useless
     
  4. Enivid

    Enivid Administrator Staff Member

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    Because of the great disposition of currency rates to return to their mean.

    What? And what else can the Forex indicators be based on?
     
  5. Lesiro

    Lesiro Trader

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    I think RSI gives a better trend, probably even easier to use. However, I wonder everyone knows about all these indicators. So, even the actual buyers/sellers would know they are buying/ selling near oversold/overbought positions. Yet, they go ahead with their trade. Why? Is this due to difference in strategy?
     
  6. Enivid

    Enivid Administrator Staff Member

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    Not all traders are looking at RSI when entering trades. And not all traders have the luxury of choosing when to buy or sell - some of them trade because they actually need a particular foreign currency.
     
  7. hayseed

    hayseed Master Trader

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    //-----

    hey lesiro....... a few other the reasons for, ' Yet, they go ahead with their trade', might be traders use differing time frames and indicator settings....

    the rsi(10) might be oversold on the 60 minute chart yet overbought on the 1440..... likewise the rsi(7) might be overbought on the daily chart but the rsi(24) might be oversold on the same daily chart..... assuming there is such a thing as overbought and oversold......

    someone short the eurgbp might be interested in adding to winners as the rsi goes clearly oversold in the thought that it might breakdown further...... this would be similar to trading using fractals.....

    let's not leave out chain reaction stoploss's being hit, central bank interventions, and the fact that many traders are not fully educated at timing trades......

    some use moving averages for trend detection so a momentum indicator like rsi might not be on their minds.....

    and some claim to abhor indicators altogether..... so they probably cant even spell rsi......h
     

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