r4bb1t

when you start learning of technical analysis. you had to hear 'Divergence Signal' hundred of times that says those are powerful reversal signal. you know what? all the oscillators that has Divergence signals are calculated by exponential moving average. such as famous MACD, RSI. but what if replacing EMA to SMA from the equation? divergence signals are gone. this implies that divergence signals are not from the oscillator calculation. exponential moving average generates them. it is just that the power of movement doesn't increasing or decreasing 'exponentially' do you believe that a Trend must have exponential movement? in my opinion divergence signal is most overestimate technique. and it makes critical trading failure.

as far as i know, most traders prefer EMA (or anything other) than SMA. but Bollinger Bands used SMA and i never seen Modified BB that usign other moving averages. is there any special reason that BB should have made with SMA?