What are the most used indicators by institutions to detect divergences?

[Sun2k]

Hello  ,

What are the most used indicators by institutions to detect divergences?

And what do you think are the best indicators to detect divergences?

[1715292577]

1715292577

[1715292577]

1715292577

[1715292577]

1715292577

[Bitcoin_Arena]

I am not institutional trader but the most talked about Indicator is probably the Relative Strength index (RSI)

Other indicators I have seen being used to detect divergence are Stochastic indicator and Moving Average Convergence/Divergence (MACD). Try checking each of them out and do some backtesting to see which one is more effective for your trading strategy

[BitMaxz]

There are lots of indicators but most likely they use MACD and RSI. Divergence is a part of technical analysis and other indicators are Stochastic Oscillators and CCI divergence indicators. If you want some more custom script/indicator check trading view they have lots of divergence indicators that you can use.

Here's the link https://www.tradingview.com/scripts/divergence/

[Sun2k]

Thank you, your answers were very helpful to me.

[tbct_mt2]

As institutions have big capital, their main priorities are volume and they will find projects with high trading volume. That will help them to get in and get out without so much delays and issues of price impact by their big capital.

Volume is important to consider a pump is an actual growth or just a pump and dump game. Volume is critical to consider where small investors shake their hands and capitulate. Testing volume is one of last test from institutions and whales to see whether they can start to manipulate the market easily. If they test and find that they are biggest controllers in the market, they will kick off their manipulating game.

[palle11]

How are you talking about institutional traders when you are not one. Trying to follow what they do will only land you into consistent loses because they are huge traders with inestimable capital and you can't just follow them. Do your trade learning and know the indicators that can very well be fine for what you are looking for. For divergent indicators, I hear MACD works for it but I don't use it. You can implore MA and RSI on long hours.

[stomachgrowls]

Hello  ,

What are the most used indicators by institutions to detect divergences?

And what do you think are the best indicators to detect divergences?

When we do talk about divergence then this is usually that you could really be able to see or get on using RSI (Relative Strength Index)

Here's some link for having idea on how to make use of it.
https://www.flowbank.com/en/learning-center/how-to-trade-divergence-with-technical-indicators

When finding out some biases then it would really be needing up some confirmation on another time frame.
This is usually that common on forex or stocks trading but somewhat does relevant on using it on crypto space even though
volatility is indeed high.

[adaseb]

Institutions don't really use technical analysis. If they do its maybe for some confirmation. They do more research and have more fundamentals. Maybe quantz are more into TA but institutions play the long game.

They are in it for months and years and they don't need to pin point a perfect entry. So they basically don't need to use moving average or divergences. And keep in mind that most TA is never perfect. Divergences don't always work. Its hard to tell whether it works unless its in hindsight. There are many divergences now but who knows if this is the actual low.

[CryptoYar]

Hello  ,

What are the most used indicators by institutions to detect divergences?

And what do you think are the best indicators to detect divergences?

Don't know what indicator they use to detect divergences might be RSI or their custom indicator. However, if you want to find the divergences by yourself then you can do it, as it is very simple and easy with RSI.

Bearish Divergences
Regular divergence When price makes higher high and on the other hand, the indicator makes higher low.  
Hidden Bearish Divergences Price makes lower high and indicator (RSI) makes higher high.

Bullish divergences
Regular Bullish divergences Price makes lower low and indicator makes higher low.
Hidden Bullish Divergences Price makes higher low and your indicator makes lower low.

[Sun2k]

thank you very much to all.. very helpful 

[Kgdktac]

The best indicators for detecting divergences depend on the individual trader's preferences and strategies.
Some traders prefer to use multiple indicators in combination to get a clearer picture of the market trend and detect divergences


Some of the most commonly used indicators include: both by institutions and otherwise

Moving Averages (MA)
Bollinger Bands
Relative Strength Index (RSI)
Macd (Moving Average Convergence Divergence)
Stochastic Oscillator

[Timmzzy]

Apart from
 

The best indicators for detecting divergences depend on the individual trader's preferences and strategies.
Some traders prefer to use multiple indicators in combination to get a clearer picture of the market trend and detect divergences


Some of the most commonly used indicators include: both by institutions and otherwise

Moving Averages (MA)
Bollinger Bands
Relative Strength Index (RSI)
Macd (Moving Average Convergence Divergence)
Stochastic Oscillator

have you come across TDI, full meaning is TRADERS DYNAMIC INDEX this is the upgraded version of RSI the institutions make use of this indicator too, if you have any idea OF BTMM {BEAT THE MARKET MAKER} strategy.

[Franctoshi]

It's not in my knowledge that institutional traders rely on these indicators to trade except if we hear from the instructional side, From my study of the smart money concept, how the big banks, hedge funds, and other international traders trade, their attention is focused on areas of liquidity, order blocks, and the COT data to see how other institutions are adding and reducing their position in the market because they are the market movers and I see no reason why they should rely on indicators to detect divergence.

[tbct_mt2]

Institutions don't really use technical analysis. If they do its maybe for some confirmation. They do more research and have more fundamentals. Maybe quantz are more into TA but institutions play the long game.

They are in it for months and years and they don't need to pin point a perfect entry. So they basically don't need to use moving average or divergences. And keep in mind that most TA is never perfect. Divergences don't always work. Its hard to tell whether it works unless its in hindsight. There are many divergences now but who knows if this is the actual low.

They have very long term vision and you are right, they invest in years like Microstrategy, a true institutional investor. With this investment style, they look more on fundamentals of Bitcoin and do dollar cost averaging like Microstrategy.

They look at one of most important fundamentals of Bitcoin, its controlled supply. They know in next 3 halvings including a 2024 halving, Bitcoin will have only about 1% of total supply left till 2140 for miners to get from block rewards. If they have money, they will continue to DCA.

Maybe they will use technical indicators to make news and manipulate the market.

https://en.bitcoin.it/wiki/Controlled_supply

[sheenshane]

And what do you think are the best indicators to detect divergences?

IMO, these indicators are specifically designed to detect divergences.

• RSI
• MACD
• Stochastic Oscillator

Because as I see many experts considering these indicators are commonly used to identify divergences between the price and the indicator itself, which can provide valuable insights into potential trend reversals or continuations.  They often rely on these indicators to identify divergences between price and momentum or trend, which can help them make a near-to-accurate price forecast.

[rybako]

Hello  ,

What are the most used indicators by institutions to detect divergences?

And what do you think are the best indicators to detect divergences?

From what I've read and experienced in my 5+ years of trading crypto, they often rely on Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) to detect divergences because it helps them to identify potential shifts in market momentum and trends.

But that could still vary, depending on a trader's strategy and preferences. Some traders also find value in indicators like Stochastic Oscillator, Volume, and Bollinger Bands.

[cute nmp]

Most commonly used indicators  by Institutions to detect divergences in financial markets include the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and Stochastic Oscillator. All the following indicators helps identify divergences between price movements and the indicators themselves, signaling potential shifts in market momentum or trend reversals.

[JeremyW99]

RSI.

But there's an indicator called "divergence indicator" on tradingview which is basically an RSI which makes out the divergences for you.

[awik p]

Divergence patterns are indeed a signal to make transactions, this can be shown on the indicators RSI (relative strength index) and MACD (Moving Average Convergence/Divergence). besides that the stochastic oscillator and EMA can also be used. usually the price will react when we find that signal. but not everything will end perfectly, because failed signals can also occur, therefore we must be able to anticipate when a signal doesn't work so that we don't suffer from deeper losses