Hello Gordon,

There are not any RD indicators being developed to my knowledge. It would be helpful no question. Must be too complicated for most programmers. The two I hired for this purpose were not up to task. There are knowledgably traders who are also excellent programmers which have no doubt programmed this RD/fractal indicator and use it in an EA. as the foundation for trades with the trend.

Loren

----- Original Message -----

From: Gordon Gibson

To: MetaTrader_Experts_and_Indicators@yahoogroups.com

Sent: Wednesday, March 21, 2007 11:09 AM

Subject: Re: [MT_E and I] REVERSE DIVERGENCE its use and importance

Great stuff Loren. Are there any automatic Reverse Divergence Indicators/Drawing tools being developed by anyone?

----- Original Message -----

From: Loren Morlan

To: Divergence@yahoogroups.com

Sent: Tuesday, March 20, 2007 12:16 PM

Subject: [MT_E and I] REVERSE DIVERGENCE its use and importance

There are two articles which appear at the Divergence board. One is authored by M. Pring the other B. Star. Both articles deal with the issue of "reverse or hidden divergence". This divergence was first observed by A. Cardwell and is discussed in J. Hayden RSI book. Hayden's comments in his book relating to hidden divergence are in error. Hayden's comments however, describing Caldwell's work is correct. These articles pertaining to reverse divergence are the most important aids to trading.

Reverse divergence only arises in an existing, established trend and is therefore the most reliable divergence. More reliable than classic divergence which is notoriously unreliable. I never enter a trade without reverse divergence being present because I want to enter that trade at the lowest risk opportunity in the direction of the trend.

It will be noted that Pring suggests use of Momentum/rate of change as the oscillator of choice in the search for reverse divergence. Star uses two different EPA 5 and 15. They both observe that any oscillator such as RSI, AO, MACD, ADX, etc. may be used. I prefer multiple oscillators, namely, RSI 14, Momentum 14, AO or MACD. In addition I use fractals to locate objective low or high points in the oscillators.

Daily GBP/USD, shows that all of these oscillators trace reverse positive divergences suggesting an uptrend in this period and that price will likely retest highs in the 1.9800 to 1.9860 area. Price is presently moving higher in response to "accumulation" not "distribution" in the daily period. 3/20/07, chart attached shows RPD at the vertical red lines, with optimal entry long on 3/5/07. The chart also shows a historical RPD and active classic positive divergence.

Reverse divergences will be observed in all time periods and is used to enter or re-enter a position using the 5, 15, 30, etc. minute periods in the direction of the daily or 4 hour trend.

Once the trend issue is determined classic divergence may also be used with reverse divergence for entry.

Loren

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