Sibbet Demand Index Divergence was developed by James Sibbet. The developer described six rules for using this demand index.
This is a complex indicator that describes the buying and selling level by using the price and volume. Traders use it to estimate that where the security price is going high and where it is low. And also tells that how much long and short time it will be up and down. Traders use this indicator to increase the possibility of profit.
Sibbet Demand Index Divergence
There are six rules that are followed for the usage of demand index. These rules are such as follows:
- The divergence between the demand index and the price tells the total loss in price.
- In this indicator the price factor also tells the profit factor.
- Large prices tell the high demand index with the help of low demand.
- When the demand index becomes zero it tells that there is a change in the trend.
- When this index stops on zero it tells that there is a chance of loss.
- Divergence between the price and index also tells there can be loss or profit.
Mostly computer software’s creates some minor changes in this indicator so it can be used with less complexity.