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Divergence - Volume / Price by Jose Silva

From: Paolo <>
To: <>
Date: Saturday, May 20, 2006, 11:25:58 PM
Subject: [EquisMetaStock Group] A Metastock Price Oscilator

Hi everyone!

My name is Pablo Bozzolo, italo-argentinean. I'd like to make a little contribution with my most simple but powerful indicator, a kind of price oscilator:

Ultimate ROC

{By Pablo Bozzolo (feb-2006)}

x:=Input("Number of periods:",3,200,12);
(CLOSE / (Mov(CLOSE,x,E) )) -1 ; {12 is the default}

U should buy at significant bottoms and sell at significant tops. It's really simple but It' works fine. (It can anticipate more than others price oscilators)

I hope to be able to exchange ideas and formulas with U.

Best regards,

BTW: search of divergences in this indicator is good idea.

From: bill rook <>
To: <>
Date: Sunday, May 21, 2006, 1:03:00 AM
Subject: [EquisMetaStock Group] A Metastock Price Oscilator


What parameters do you use with the Ultimate ROC?


From: Paolo <>
To: <>
Date: Sunday, May 21, 2006, 2:26:08 PM
Subject: [EquisMetaStock Group] A Metastock Price Oscilator

br> What parameters do you use with the Ultimate ROC?

Dear Bill,

The only parameter in this very-simple indicator is the 'number of periods' (days) of the moving average.
By default it's 12. So the formula can be more simple yet:

(CLOSE / (Mov(CLOSE,12,E) )) -1 ;

The "-1" is just cosmetic :)

"Andrew Tomlinson" <> wrote:

> Like any other oscillator, though, it can show overbought or
> oversold conditions that are surprisingly persistent, so you should
> always wait for price confirmation.

Andrew: this indicator do not show overbough or persistent oversold conditions. It's very diferent to RSI or Stochastic oscilators. Thank U very much for your comments :)


From: Andrew Tomlinson <>
To: <>
Date: Sunday, May 21, 2006, 11:46:08 PM
Subject: [EquisMetaStock Group] A Metastock Price Oscilator

Hi Paolo

The oscillator you are describing is simply showing the deviation of the close from an exponential moving average expressed on a percentage basis. It is similar to a number of oscillators described in the literature - e.g. DiNapoli's detrended oscillator, which is the close minus the MA. The only difference here is expressing the change on a percentage basis and using an EMA instead of a SMA. If you normalize the deviation by dividing by the standard deviation you get a Bollinger Band variant (close to %b) if you normalize by ATR you get what I call the Moving Average Deviation. It is used in many cases (e.g. DiNapoli) as on overbought/oversold indicator. You and every other user are, of course, free to use it in whatever way you like.

With respect, the '-1' is not cosmetic. Mathematically, C/MA -1 is the same as (C-MA)/MA, i.e. the deviation of the close from the MA expressed as a percentage of the MA.

It's great fun playing with indicators in MetaStock. And varying the formulae can be a good way to appreciate how they work. But you do often find that someone had the same idea already.


From: Paolo <>
To: <>
Date: Monday, May 22, 2006, 3:30:12 AM
Subject: [EquisMetaStock Group] A Volume-Price Divergence Finder


Andrew 've shown that my price oscilator was invented by DiNapoli (italian ?) :)

Here there is a indicator to see how strong is a negative divergence between volume and price.

I hope It has no copyright!!!!!!

Volume/Price Divergence Indicator

{Finder of negative divergences between volume and price }

{Pablo Bozzolo - May 2006}

Periods:=5; {5 or 6 are the best values tested}

AND V<Ref(V,-Periods)
AND C>Mov(C,Periods,E)
AND C>Ref(C,-Periods),-Mov(V,Periods,S)/Mov(V,100,S),0);

Where Mov(V,Periods,S)/Mov(V,100,S),0) try to be a measure of the strenght of divergence.

Sometimes when a huge divergence is shown the price don't go down but it enters in a trading zone (neutral).

I use this indicator daily.

Good luck!

PD: sorry because when I try to write fast in english I make a lot of mistakes.

From: Jose Silva <>
To: <>
Date: Monday, May 22, 2006, 6:49:47 AM
Subject: [EquisMetaStock Group] Re: A Volume-Price Divergence Finder

Pablo, here's some possibly useful additions to your Volume/Price Sivergence Indicator:

Divergence - Volume / Price

Attempt at finding divergences between Volume
and Price - Pablo Bozzolo - May 2006 }

{ User inputs }
thr:=Input("Divergence strength threshold %",0,100,1.5);
pds:=Input("Divergence periods",1,260,5);


{ Divergences }
AND V>Ref(V,-pds)
AND C<PrcEma
AND C<Ref(C,-pds),
AND V<Ref(V,-pds)
AND C>PrcEma
AND C>Ref(C,-pds),

{ Plot signals in own window }

jose '-)

From: Paolo <>
To: Jose Silva <>
Date: Monday, May 22, 2006, 4:40:39 PM
Subject: [EquisMetaStock Group] POSITIVE divergences betewen Price and Volume - Finder


Thanks for your suggestions to improve my divergence finder. I like how you write your programs (easy to read). In your version you introduce the threshold concept. It's great. To see something I just need to add at the end:

{ Plot signals in own window }

You use Mov(V,periods,S)/Mov(V,100,S) as a FILTER instead of strenght meassure of the divergence. For me is a new concept (!)

On the other hand, you look for POSITIVE divergences but I THINK the fact of the volume go up when the price go down it's NOT a divergence. Prices can go down very fast when there is increase of volume. Am I wrong ? (I'm afraid to be confused)

Thank U!

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