Cari dalam skrip untuk "Divergence"
[RS]Leading Momentum Oscilator V0EXPERIMENTAL: Momentum oscilator based on offset, can also be used for divergence/convergence
ridenz rsi"Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction.
If the stock is rising and making new highs, ideally the RSI is reaching new highs as well. If the stock is making new highs, but the RSI starts making lower highs, this warns the price uptrend may be weakening. This is negative divergence.
Positive divergence is the opposite situation. Imagine the price of a stock is making new lows while the RSI makes higher lows with each swing in the stock price. Investors may conclude that the lower lows in the stock price are losing their downward momentum and a trend reversal may soon follow.
Divergence is one of the common uses of many technical indicators, primarily the oscillators."
Divergence from Moving AverageSimple script to monitor the difference between closing price and sma(20), sma(20) and sma(60), sma(60) and sma(120). The zero axis provides times when the moving average converge.
Divergence Volume of BiznesFilosofThis indicator warns in advance about impending trouble. And also prepares in advance for a new rally. It also shows the ratio of volumes in dollars to the actual volume of the instrument. We can see when whales accumulate positions and carry extra passengers into the market.
More details about this indicator on my channel in YouTube.
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Этот индикатор предупреждает заранее о надвигающейся беде. А также готовит заранее к новому ралли. Также он показывает соотношение объемов в долларах к фактическому объёму инструмента. Мы можем видеть когда киты накапливают позиции и выносят лишних пассажиров в срынка.
Более подробно про этот индикатор на моём канале в Ютуб.
WaveTrend With Divs & RSI(STOCH) Divs by WeloTradesWaveTrend with Divergences & RSI(STOCH) Divergences by WeloTrades
Overview
The "WaveTrend With Divergences & RSI(STOCH) Divergences" is an advanced Pine Script™ indicator designed for TradingView, offering a multi-dimensional analysis of market conditions. This script integrates several technical indicators—WaveTrend, Money Flow Index (MFI), RSI, and Stochastic RSI—into a cohesive tool that identifies both regular and hidden divergences across these indicators. These divergences can indicate potential market reversals and provide critical trading opportunities.
This indicator is not just a simple combination of popular tools; it offers extensive customization options, organized data presentation, and valuable trading signals that are easy to interpret. Whether you're a day trader or a long-term investor, this script enhances your ability to make informed decisions.
Originality and Usefulness
The originality of this script lies in its integration and the synergy it creates among the indicators used. Rather than merely combining multiple indicators, this script allows them to work together, enhancing each other's strengths. For example, by identifying divergences across WaveTrend, RSI, and Stochastic RSI simultaneously, the script provides multiple layers of confirmation, which reduces the likelihood of false signals and increases the reliability of trading signals.
The usefulness of this script is apparent in its ability to offer a consolidated view of market dynamics. It not only simplifies the analytical process by combining different indicators but also provides deeper insights through its divergence detection features. This comprehensive approach is designed to help traders identify potential market reversals, confirm trends, and ultimately make more informed trading decisions.
How the Components Work Together
1. Cross-Validation of Signals
WaveTrend: This indicator is primarily used to identify overbought and oversold conditions, as well as potential buy and sell signals. WaveTrend's ability to smooth price data and reduce noise makes it a reliable tool for identifying trend reversals.
RSI & Stochastic RSI: These momentum oscillators are used to measure the speed and change of price movements. While RSI identifies general overbought and oversold conditions, Stochastic RSI offers a more granular view by tracking the RSI’s level relative to its high-low range over a period of time. When these indicators align with WaveTrend signals, it adds a layer of confirmation that enhances the reliability of the signals.
Money Flow Index (MFI): This volume-weighted indicator assesses the inflow and outflow of money in an asset, giving insights into buying and selling pressure. By analyzing the MFI alongside WaveTrend and RSI indicators, the script can cross-validate signals, ensuring that buy or sell signals are supported by actual market volume.
Example Bullish scenario:
When a bullish divergence is detected on the RSI and confirmed by a corresponding bullish signal on the WaveTrend, along with an increasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
Example Bearish scenario:
When a bearish divergence is detected on the RSI and confirmed by a corresponding bearish signal on the WaveTrend, along with an decreasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
2. Divergence Detection and Market Reversals
Regular Divergences: Occur when the price action and an indicator (like RSI or WaveTrend) move in opposite directions. Regular bullish divergence signals a potential upward reversal when the price makes a lower low while the indicator makes a higher low. Conversely, regular bearish divergence suggests a downward reversal when the price makes a higher high, but the indicator makes a lower high.
Hidden Divergences: These occur when the price action and indicator move in the same direction, but with different momentum. Hidden bullish divergence suggests the continuation of an uptrend, while hidden bearish divergence suggests the continuation of a downtrend. By detecting these divergences across multiple indicators, the script identifies potential trend reversals or continuations with greater accuracy.
Example: The script might detect a regular bullish divergence on the WaveTrend while simultaneously identifying a hidden bullish divergence on the RSI. This combination suggests that while a trend reversal is possible, the overall market sentiment remains bullish, providing a nuanced view of the market.
A Regular Bullish Divergence Example:
A Hidden Bullish Divergence Example:
A Regular Bearish Divergence Example:
A Hidden Bearish Divergence Example:
3. Trend Strength and Sentiment Analysis
WaveTrend: Measures the strength and direction of the trend. By identifying the extremes of market sentiment (overbought and oversold levels), WaveTrend provides early signals for potential reversals.
Money Flow Index (MFI): Assesses the underlying sentiment by analyzing the flow of money. A rising MFI during an uptrend confirms strong buying pressure, while a falling MFI during a downtrend confirms selling pressure. This helps traders assess whether a trend is likely to continue or reverse.
RSI & Stochastic RSI: Offer a momentum-based perspective on the trend’s strength. High RSI or Stochastic RSI values indicate that the asset may be overbought, suggesting a potential reversal. Conversely, low values indicate oversold conditions, signaling a possible upward reversal.
Example:
During a strong uptrend, the WaveTrend & RSI's might signal overbought conditions, suggesting caution. If the MFI also shows decreasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Example:
During a strong downtrend, the WaveTrend & RSI's might signal oversold conditions, suggesting caution. If the MFI also shows increasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Conclusion
The "WaveTrend With Divergences & RSI(STOCH) Divergences" script offers a powerful, integrated approach to technical analysis by combining trend, momentum, and sentiment indicators into a single tool. Its unique value lies in the cross-validation of signals, the ability to detect divergences, and the comprehensive view it provides of market conditions. By offering traders multiple layers of analysis and customization options, this script is designed to enhance trading decisions, reduce false signals, and provide clearer insights into market dynamics.
WAVETREND
Display of WaveTrend:
Display of WaveTrend Setting:
WaveTrend Indicator Explanation
The WaveTrend indicator helps identify overbought and oversold conditions, as well as potential buy and sell signals. Its flexibility allows traders to adapt it to various strategies, making it a versatile tool in technical analysis.
WaveTrend Input Settings:
WT MA Source: Default: HLC3
What it is: The data source used for calculating the WaveTrend Moving Average.
What it does: Determines the input data to smooth price action and filter noise.
Example: Using HLC3 (average of High, Low, Close) provides a smoother data representation compared to using just the closing price.
Length (WT MA Length): Default: 3
What it is: The period used to calculate the Moving Average.
What it does: Adjusts the sensitivity of the WaveTrend indicator, where shorter lengths respond more quickly to price changes.
Example: A length of 3 is ideal for short-term analysis, providing quick reactions to price movements.
WT Channel Length & Average: Default: WT Channel Length = 9, Average = 12
What it is: Lengths used to calculate the WaveTrend channel and its average.
What it does: Smooths out the WaveTrend further, reducing false signals by averaging over a set period.
Example: Higher values reduce noise and help in identifying more reliable trends.
Channel: Style, Width, and Color:
What it is: Customization options for the WaveTrend channel's appearance.
What it does: Adjusts how the channel is displayed, including line style, width, and color.
Example: Choosing an area style with a distinct color can make the WaveTrend indicator clearly visible on the chart.
WT Buy & Sell Signals:
What it is: Settings to enable and customize buy and sell signals based on WaveTrend.
What it does: Allows for the display of buy/sell signals and customization of their shapes and colors.
When it gives a Buy Signal: Generated when the WaveTrend line crosses below an oversold level and then rises back, indicating a potential upward price movement.
When it gives a Sell Signal: Triggered when the WaveTrend line crosses above an overbought level and then declines, suggesting a possible downward trend.
Example: The script identifies these signals based on mean reversion principles, where prices tend to revert to the mean after reaching extremes. Traders can use these signals to time their entries and exits effectively.
WAVETREND OVERBOUGTH AND OVERSOLD LEVELS
Display of WaveTrend with Overbought & Oversold Levels:
Display of WaveTrend Overbought & Oversold Levels Settings:
WaveTrend Overbought & Oversold Levels Explanation
WT OB & OS Levels: Default: OB Level 1 = 53, OB Level 2 = 60, OS Level 1 = -53, OS Level 2 = -60
What it is: The default overbought and oversold levels used by the WaveTrend indicator to signal potential market reversals.
What it does: When the WaveTrend crosses above the OB levels, it indicates an overbought condition, potentially signaling a reversal or selling opportunity. Conversely, when it crosses below the OS levels, it indicates an oversold condition, potentially signaling a reversal or buying opportunity.
Example: A trader might use these levels to time entry or exit points, such as selling when the WaveTrend crosses into the overbought zone or buying when it crosses into the oversold zone.
Show OB/OS Levels: Default: True
What it is: Toggle options to show or hide the overbought and oversold levels on your chart.
What it does: When enabled, these levels will be visually represented on your chart, helping you to easily identify when the market reaches these critical thresholds.
Example: Displaying these levels can help you quickly see when the WaveTrend is approaching or has crossed into overbought or oversold territory, allowing for more informed trading decisions.
Line Style, Width, and Color for OB/OS Levels:
What it is: Options to customize the appearance of the OB and OS levels on your chart, including line style (solid, dotted, dashed), line width, and color.
What it does: These settings allow you to adjust how prominently these levels are displayed on your chart, which can help you better visualize and respond to overbought or oversold conditions.
Example: Setting a thicker, dashed line in a contrasting color can make these levels stand out more clearly, aiding in quick visual identification.
Example of Use:
Scenario: A trader wants to identify potential selling points when the market is overbought. They set the OB levels at 53 and 60, choosing a solid, red line style to make these levels clear on their chart. As the WaveTrend crosses above 53, they monitor for further price action, and upon crossing 60, they consider initiating a sell order.
WAVETREND DIVERGENCES
Display of WaveTrend Divergence:
Display of WaveTrend Divergence Setting:
WaveTrend Divergence Indicator Explanation
The WaveTrend Divergence feature helps identify potential reversal points in the market by highlighting divergences between the price and the WaveTrend indicator. Divergences can signal a shift in market momentum, indicating a possible trend reversal. This component allows traders to visualize and customize divergence detection on their charts.
WaveTrend Divergence Input Settings:
Potential Reversal Range: Default: 28
What it is: The number of bars to look back when detecting potential tops and bottoms.
What it does: Sets the range for identifying possible reversal points based on historical data.
Example: A setting of 28 looks back across the last 28 bars to find reversal points, offering a balance between responsiveness and reliability.
Reversal Minimum LVL OB & OS: Default: OB = 35, OS = -35
What it is: The minimum overbought and oversold levels required for detecting potential reversals.
What it does: Adjusts the thresholds that trigger a reversal signal based on the WaveTrend indicator.
Example: A higher OB level reduces the sensitivity to overbought conditions, potentially filtering out false reversal signals.
Lookback Bar Left & Right: Default: Left = 10, Right = 1
What it is: The number of bars to the left and right used to confirm a top or bottom.
What it does: Helps determine the position of peaks and troughs in the price action.
Example: A larger left lookback captures more extended price action before the peak, while a smaller right lookback focuses on the immediate past.
Lookback Range Min & Max: Default: Min = 5, Max = 60
What it is: The minimum and maximum range for the lookback period when identifying divergences.
What it does: Fine-tunes the detection of divergences by controlling the range over which the indicator looks back.
Example: A wider range increases the chances of detecting divergences across different market conditions.
R.Div Minimum LVL OB & OS: Default: OB = 53, OS = -53
What it is: The threshold levels for detecting regular divergences.
What it does: Adjusts the sensitivity of the regular divergence detection.
Example: Higher thresholds make the detection more conservative, identifying only stronger divergence signals.
H.Div Minimum LVL OB & OS: Default: OB = 20, OS = -20
What it is: The threshold levels for detecting hidden divergences.
What it does: Similar to regular divergence settings but for hidden divergences, which can indicate potential reversals that are less obvious.
Example: Lower thresholds make the hidden divergence detection more sensitive, capturing subtler market shifts.
Divergence Label Options:
What it is: Options to display and customize labels for regular and hidden divergences.
What it does: Allows users to visually differentiate between regular and hidden divergences using customizable labels and colors.
Example: Using different colors and symbols for regular (R) and hidden (H) divergences makes it easier to interpret signals on the chart.
Text Size and Color:
What it is: Customization options for the size and color of divergence labels.
What it does: Adjusts the readability and visibility of divergence labels on the chart.
Example: Larger text size may be preferred for charts with a lot of data, ensuring divergence labels stand out clearly.
FAST & SLOW MONEY FLOW INDEX
Display of Fast & Slow Money Flow:
Display of Fast & Slow Money Flow Setting:
Fast Money Flow Indicator Explanation
The Fast Money Flow indicator helps traders identify the flow of money into and out of an asset over a shorter time frame. By tracking the volume-weighted average of price movements, it provides insights into buying and selling pressure in the market, which can be crucial for making timely trading decisions.
Fast Money Flow Input Settings:
Fast Money Flow: Length: Default: 9
What it is: The period used for calculating the Fast Money Flow.
What it does: Determines the sensitivity of the Money Flow calculation. A shorter length makes the indicator more responsive to recent price changes, while a longer length provides a smoother signal.
Example: A length of 9 is suitable for traders looking to capture quick shifts in market sentiment over a short period.
Fast MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, effectively amplifying or reducing the visual impact of the indicator.
Example: A higher multiplier can make the Money Flow more prominent on the chart, aiding in the quick identification of significant money flow changes.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Fast Money Flow plot on the chart.
What it does: Allows you to move the Money Flow plot up or down on the chart to avoid overlap with other indicators.
Example: Adjusting the Y Position can be useful if you have multiple indicators on the chart and need to maintain clarity.
Fast MFI Style, Width, and Color:
What it is: Customization options for how the Fast Money Flow is displayed on the chart.
What it does: Enables you to choose between different plot styles (line or area), set the line width, and select colors for positive and negative money flow.
Example: Using different colors for positive (green) and negative (red) money flow helps to visually distinguish between periods of buying and selling pressure.
Slow Money Flow Indicator Explanation
The Slow Money Flow indicator tracks the flow of money into and out of an asset over a longer time frame. It provides a broader perspective on market sentiment, smoothing out short-term fluctuations and highlighting longer-term trends.
Slow Money Flow Input Settings:
Slow Money Flow: Length: Default: 12
What it is: The period used for calculating the Slow Money Flow.
What it does: A longer period smooths out short-term fluctuations, providing a clearer view of the overall money flow trend.
Example: A length of 12 is often used by traders looking to identify sustained trends rather than short-term volatility.
Slow MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Slow Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, helping to emphasize the indicator’s significance.
Example: Increasing the multiplier can help highlight the Money Flow in markets with less volatile price action.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Slow Money Flow plot on the chart.
What it does: Allows for vertical repositioning of the Money Flow plot to maintain chart clarity when used with other indicators.
Example: Adjusting the Y Position ensures that the Slow Money Flow indicator does not overlap with other key indicators on the chart.
Slow MFI Style, Width, and Color:
What it is: Customization options for the visual display of the Slow Money Flow on the chart.
What it does: Allows you to choose the plot style (line or area), set the line width, and select colors to differentiate positive and negative money flow.
Example: Customizing the colors for the Slow Money Flow allows traders to quickly distinguish between buying and selling trends in the market.
RSI
Display of RSI:
Display of RSI Setting:
RSI Indicator Explanation
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It is typically used to identify overbought or oversold conditions in the market, providing traders with potential signals for buying or selling.
RSI Input Settings:
RSI Source: Default: Close
What it is: The data source used for calculating the RSI.
What it does: Determines which price data (e.g., close, open) is used in the RSI calculation, affecting how the indicator reflects market conditions.
Example: Using the closing price is standard practice, as it reflects the final agreed-upon price for a given time period.
MA Type (Moving Average Type): Default: SMA
What it is: The type of moving average applied to the RSI for smoothing purposes.
What it does: Changes the smoothing technique of the RSI, impacting how quickly the indicator responds to price movements.
Example: Using an Exponential Moving Average (EMA) will make the RSI more sensitive to recent price changes compared to a Simple Moving Average (SMA).
RSI Length: Default: 14
What it is: The period over which the RSI is calculated.
What it does: Adjusts the sensitivity of the RSI. A shorter length (e.g., 7) makes the RSI more responsive to recent price changes, while a longer length (e.g., 21) smooths out the indicator, reducing the number of signals.
Example: A 14-period RSI is commonly used for identifying overbought and oversold conditions, providing a balance between sensitivity and reliability.
RSI Plot Style, Width, and Color:
What it is: Options to customize the appearance of the RSI line on the chart.
What it does: Allows you to adjust the visual representation of the RSI, including the line width and color.
Example: Setting a thicker line width and a bright color like yellow can make the RSI more visible on the chart, aiding in quick analysis.
Display of RSI with RSI Moving Average:
RSI Moving Average Explanation
The RSI Moving Average adds a smoothing layer to the RSI, helping to filter out noise and provide clearer signals. It is particularly useful for confirming trend strength and identifying potential reversals.
RSI Moving Average Input Settings:
MA Length: Default: 14
What it is: The period over which the Moving Average is calculated on the RSI.
What it does: Adjusts the smoothing of the RSI, helping to reduce false signals and provide a clearer trend indication.
Example: A 14-period moving average on the RSI can smooth out short-term fluctuations, making it easier to spot genuine overbought or oversold conditions.
MA Plot Style, Width, and Color:
What it is: Customization options for how the RSI Moving Average is displayed on the chart.
What it does: Allows you to adjust the line width and color, helping to differentiate the Moving Average from the main RSI line.
Example: Using a contrasting color for the RSI Moving Average (e.g., magenta) can help it stand out against the main RSI line, making it easier to interpret the indicator.
STOCHASTIC RSI
Display of Stochastic RSI:
Display of Stochastic RSI Setting:
Stochastic RSI Indicator Explanation
The Stochastic RSI (Stoch RSI) is a momentum oscillator that measures the level of the RSI relative to its high-low range over a set period of time. It is used to identify overbought and oversold conditions, providing potential buy and sell signals based on momentum shifts.
Stochastic RSI Input Settings:
Stochastic RSI Length: Default: 14
What it is: The period over which the Stochastic RSI is calculated.
What it does: Adjusts the sensitivity of the Stochastic RSI. A shorter length makes the indicator more responsive to recent price changes, while a longer length smooths out the fluctuations, reducing noise.
Example: A length of 14 is commonly used to identify momentum shifts over a medium-term period, providing a balanced view of potential overbought or oversold conditions.
Display of Stochastic RSI %K Line:
Stochastic RSI %K Line Explanation
The %K line in the Stochastic RSI is the main line that tracks the momentum of the RSI over the chosen period. It is the faster-moving component of the Stochastic RSI, often used to identify entry and exit points.
Stochastic RSI %K Input Settings:
%K Length: Default: 3
What it is: The period used for smoothing the %K line of the Stochastic RSI.
What it does: Smoothing the %K line helps reduce noise and provides a clearer signal for potential market reversals.
Example: A smoothing length of 3 is common, offering a balance between responsiveness and noise reduction, making it easier to spot significant momentum shifts.
%K Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %K line.
What it does: Allows you to adjust the appearance of the %K line on the chart, including line width and color, to fit your visual preferences.
Example: Setting a blue color and a medium width for the %K line makes it stand out clearly on the chart, helping to identify key points of momentum change.
%K Fill Color (Above):
What it is: The fill color that appears above the %K line on the chart.
What it does: Adds visual clarity by shading the area above the %K line, making it easier to interpret the direction and strength of momentum.
Example: Using a light blue fill color above the %K line can help emphasize bullish momentum, making it visually prominent.
Display of Stochastic RSI %D Line:
Stochastic RSI %D Line Explanation
The %D line in the Stochastic RSI is a moving average of the %K line and acts as a signal line. It is slower-moving compared to the %K line and is often used to confirm signals or identify potential reversals when it crosses the %K line.
Stochastic RSI %D Input Settings:
%D Length: Default: 3
What it is: The period used for smoothing the %D line of the Stochastic RSI.
What it does: Smooths out the %D line, making it less sensitive to short-term fluctuations and more reliable for identifying significant market signals.
Example: A length of 3 is often used to provide a smoothed signal line that can help confirm trends or reversals indicated by the %K line.
%D Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %D line.
What it does: Allows you to adjust the appearance of the %D line on the chart, including line width and color, to match your preferences.
Example: Setting an orange color and a thicker line width for the %D line can help differentiate it from the %K line, making crossover points easier to spot.
%D Fill Color (Below):
What it is: The fill color that appears below the %D line on the chart.
What it does: Adds visual clarity by shading the area below the %D line, making it easier to interpret bearish momentum.
Example: Using a light orange fill color below the %D line can highlight bearish conditions, making it visually easier to identify.
RSI & STOCHASTIC RSI OVERBOUGHT AND OVERSOLD LEVELS
Display of RSI & Stochastic with Overbought & Oversold Levels:
Display of RSI & Stochastic Overbought & Oversold Settings:
RSI & Stochastic Overbought & Oversold Levels Explanation
The Overbought (OB) and Oversold (OS) levels for RSI and Stochastic RSI indicators are key thresholds that help traders identify potential reversal points in the market. These levels are used to determine when an asset is likely overbought or oversold, which can signal a potential trend reversal.
RSI & Stochastic Overbought & Oversold Input Settings:
RSI & Stochastic Level 1 Overbought (OB) & Oversold (OS): Default: OB Level = 170, OS Level = 130
What it is: The first set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: When the RSI or Stochastic RSI crosses above the overbought level, it suggests that the asset might be overbought, potentially signaling a sell opportunity. Conversely, when these indicators drop below the oversold level, it suggests the asset might be oversold, potentially signaling a buy opportunity.
Example: If the RSI crosses above 170, traders might look for signs of a potential trend reversal to the downside, while a cross below 130 might indicate a reversal to the upside.
RSI & Stochastic Level 2 Overbought (OB) & Oversold (OS): Default: OB Level = 180, OS Level = 120
What it is: The second set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: These levels provide an additional set of reference points, allowing traders to differentiate between varying degrees of overbought and oversold conditions, potentially leading to more refined trading decisions.
Example: When the RSI crosses above 180, it might indicate an extreme overbought condition, which could be a stronger signal for a sell, while a cross below 120 might indicate an extreme oversold condition, which could be a stronger signal for a buy.
RSI & Stochastic Overbought (OB) Band Customization:
OB Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first overbought band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first overbought band, enhancing its visibility on the chart.
Example: A dashed red line with medium width can clearly indicate the first overbought level, helping traders quickly identify when this threshold is crossed.
OB Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second overbought band on the chart.
What it does: Allows you to set the line width, style, and color for the second overbought band, providing a clear distinction from the first band.
Example: A dashed red line with a slightly thicker width can represent a more significant overbought level, making it easier to differentiate from the first level.
RSI & Stochastic Oversold (OS) Band Customization:
OS Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first oversold band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first oversold band, making it visually prominent.
Example: A dashed green line with medium width can highlight the first oversold level, helping traders identify potential buying opportunities.
OS Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second oversold band on the chart.
What it does: Allows you to set the line width, style, and color for the second oversold band, providing an additional visual cue for extreme oversold conditions.
Example: A dashed green line with a thicker width can represent a more significant oversold level, offering a stronger visual cue for potential buying opportunities.
RSI DIVERGENCES
Display of RSI Divergence Labels:
Display of RSI Divergence Settings:
RSI Divergence Lookback Explanation
The RSI Divergence settings allow traders to customize the parameters for detecting divergences between the RSI (Relative Strength Index) and price action. Divergences occur when the price moves in the opposite direction to the RSI, potentially signaling a trend reversal. These settings help refine the accuracy of divergence detection by adjusting the lookback period and range. ( NOTE: This setting only imply to the RSI. This doesn't effect the STOCHASTIC RSI. )
RSI Divergence Lookback Input Settings:
Lookback Left: Default: 10
What it is: The number of bars to look back from the current bar to detect a potential divergence.
What it does: Defines the left-side lookback period for identifying pivot points in the RSI, which are used to spot divergences. A longer lookback period may capture more significant trends but could also miss shorter-term divergences.
Example: A setting of 10 bars means the script will consider pivot points up to 10 bars before the current bar to check for divergence patterns.
Lookback Right: Default: 1
What it is: The number of bars to look forward from the current bar to complete the divergence pattern.
What it does: Defines the right-side lookback period for confirming a potential divergence. This setting helps ensure that the identified divergence is valid by allowing the script to check subsequent bars for confirmation.
Example: A setting of 1 bar means the script will look at the next bar to confirm the divergence pattern, ensuring that the signal is reliable.
Lookback Range Min: Default: 5
What it is: The minimum range of bars required to detect a valid divergence.
What it does: Sets a lower bound on the range of bars considered for divergence detection. A lower minimum range might capture more frequent but possibly less significant divergences.
Example: Setting the minimum range to 5 ensures that only divergences spanning at least 5 bars are considered, filtering out very short-term patterns.
Lookback Range Max: Default: 60
What it is: The maximum range of bars within which a divergence can be detected.
What it does: Sets an upper bound on the range of bars considered for divergence detection. A larger maximum range might capture more significant divergences but could also include less relevant long-term patterns.
Example: Setting the maximum range to 60 bars allows the script to detect divergences over a longer timeframe, capturing more extended divergence patterns that could indicate major trend reversals.
RSI Divergence Explanation
RSI divergences occur when the RSI indicator and price action move in opposite directions, signaling potential trend reversals. This section of the settings allows traders to customize the appearance and detection of both regular and hidden bullish and bearish divergences.
RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a green label color and a distinct line width makes bullish divergences easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing a red label color and a specific line width makes bearish divergences clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer green color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted red color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
STOCHASTIC DIVERGENCES
Display of Stochastic RSI Divergence Labels:
Display of Stochastic RSI Divergence Settings:
Stochastic RSI Divergence Explanation
Stochastic RSI divergences occur when the Stochastic RSI indicator and price action move in opposite directions, signaling potential trend reversals. These settings allow traders to customize the detection and visual representation of both regular and hidden bullish and bearish divergences in the Stochastic RSI.
Stochastic RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the Stochastic RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence in the Stochastic RSI suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a blue label color and a distinct line width makes bullish divergences in the Stochastic RSI easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the Stochastic RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence in the Stochastic RSI suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing an orange label color and a specific line width makes bearish divergences in the Stochastic RSI clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the Stochastic RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence in the Stochastic RSI signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer blue color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the Stochastic RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence in the Stochastic RSI signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted orange color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for Stochastic RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
Alert System:
Custom Alerts for Divergences and Reversals:
What it is: The script includes customizable alert conditions to notify you of detected divergences or potential reversals based on WaveTrend, RSI, and Stochastic RSI.
What it does: Helps you stay informed of key market movements without constantly monitoring the charts, enabling timely decisions.
Example: Setting an alert for regular bearish divergence on the WaveTrend could notify you of a potential sell opportunity as soon as it is detected.
How to Use Alerts:
Set up custom alerts in TradingView based on these conditions to be notified of potential trading opportunities. Alerts are triggered when the indicator detects conditions that match the selected criteria, such as divergences or potential reversals.
By following the detailed guidelines and examples above, you can effectively use and customize this powerful indicator to suit your trading strategy.
For further understanding and customization, refer to the input settings within the script and adjust them to match your trading style and preferences.
How Components Work Together
Synergy and Cross-Validation: The indicator combines multiple layers of analysis to validate trading signals. For example, a WaveTrend buy signal that coincides with a bullish divergence in RSI and positive fast money flow is likely to be more reliable than any single indicator’s signal. This cross-validation reduces the likelihood of false signals and enhances decision-making.
Comprehensive Market Analysis: Each component plays a role in analyzing different aspects of the market. WaveTrend focuses on trend strength, Money Flow indicators assess market sentiment, while RSI and Stochastic RSI offer detailed views of price momentum and potential reversals.
Ideal For
Traders who require a reliable, multifaceted tool for detecting market trends and reversals.
Investors seeking a deeper understanding of market dynamics across different timeframes and conditions, whether in forex, equities, or cryptocurrency markets.
This script is designed to provide a comprehensive tool for technical analysis, combining multiple indicators and divergence detection into one versatile and customizable script. It is especially useful for traders who want to monitor various indicators simultaneously and look for convergence or divergence signals across different technical tools.
Acknowledgements
Special thanks to these amazing creators for inspiration and their creations:
I want to thank these amazing creators for creating there amazing indicators , that inspired me and also gave me a head start by making this indicator! Without their amazing indicators it wouldn't be possible!
vumanchu: VuManChu Cipher B Divergences.
MisterMoTa: RSI + Divergences + Alerts .
DevLucem: Plain Stochastic Divergence.
Note
This indicator is designed to be a powerful tool in your trading arsenal. However , it is essential to backtest and adjust the settings according to your trading strategy before applying it to live trading . If you have any questions or need further assistance, feel free to reach out.
RSI Divergence • Thin‑Line, Colored, Center‑NumberRSI ky dung de xac dinh XH và vugnf dao chieu của XH
Stoch_RSI_ChartEnhanced Stochastic RSI Divergence Indicator with VWAP Filter for Charts
This custom indicator builds upon the classic Stochastic RSI to automatically detect both regular and hidden divergences. It’s designed to help traders spot potential market reversals or continuations using two methods for divergence detection (fractal‑ and pivot‑based) while offering optional VWAP filtering for confirmation.
Key Features
Stoch RSI Calculation
The indicator computes a smoothed Stoch RSI using configurable parameters for RSI length, stochastic length, and smoothing periods. An option to average the K and D lines provides a cleaner momentum view.
Divergence Detection via Fractals & Pivots
Fractal-Based Divergences:
Looks for 4-candle patterns to identify higher-highs or lower-lows in the price that are not confirmed by the oscillator, signaling potential reversals.
Pivot-Based Divergences:
Utilizes TradingView’s built-in pivot functions to find divergence conditions over adjustable pivot ranges.
Regular vs. Hidden Divergences:
Regular Divergence: Occurs when price makes a new extreme (higher high or lower low) while the Stoch RSI fails to follow suit.
Hidden Divergence: Indicates potential trend continuations when the oscillator diverges against the established price trend.
Optional VWAP Filtering
The script includes two optional VWAP filters that work as follows:
VWAP Filter on Regular Divergences:
Only confirms regular divergence signals if the current price satisfies the VWAP condition (e.g., price is above VWAP for bullish signals, below VWAP for bearish signals).
VWAP Filter on Hidden Divergences:
Similarly, hidden divergence signals are validated only when the price meets specific VWAP conditions, adding an extra layer of trend confirmation.
Customizable Alerts and Visual Labels
Easily configure divergence labels (“B” for bullish, “S” for bearish) and enable up to four alert conditions for real‑time notifications when a divergence occurs.
Credits & History:
Log RSI by @fskrypt
Divergence Detection originally by @RicardoSantos (with edits from @JustUncleL)
Further Edits by @NeoButane on August 8, 2018
Latest Edits by @FYMD on June 1, 2024
Savitzky-Golay Z-Score [BackQuant]Savitzky-Golay Z-Score
The Savitzky-Golay Z-Score is a powerful trading indicator that combines the precision of the Savitzky-Golay filter with the statistical strength of the Z-Score. This advanced indicator is designed to detect trend shifts, identify overbought or oversold conditions, and highlight potential divergences in the market, providing traders with a unique edge in detecting momentum changes and trend reversals.
Core Concept: Savitzky-Golay Filter
The Savitzky-Golay filter is a widely-used smoothing technique that preserves important signal features such as peak detection while filtering out noise. In this indicator, the filter is applied to price data (default set to HLC3) to smooth out volatility and produce a cleaner trend line. By specifying the window size and polynomial degree, traders can fine-tune the degree of smoothing to match their preferred trading style or market conditions.
Z-Score: Measuring Deviation
The Z-Score is a statistical measure that indicates how far the current price is from its mean in terms of standard deviations. In trading, the Z-Score can be used to identify extreme price moves that are likely to revert or continue trending. A positive Z-Score means the price is above the mean, while a negative Z-Score indicates the price is below the mean.
This script calculates the Z-Score based on the Savitzky-Golay filtered price, enabling traders to detect moments when the price is diverging from its typical range and may present an opportunity for a trade.
Long and Short Conditions
The Savitzky-Golay Z-Score generates clear long and short signals based on the Z-Score value:
Long Signals : When the Z-Score is positive, indicating the price is above its smoothed mean, a long signal is generated. The color of the bars turns green, signaling upward momentum.
Short Signals : When the Z-Score is negative, indicating the price is below its smoothed mean, a short signal is generated. The bars turn red, signaling downward momentum.
These signals allow traders to follow the prevailing trend with confidence, using statistical backing to avoid false signals from short-term volatility.
Standard Deviation Levels and Extreme Levels
This indicator includes several features to help visualize overbought and oversold conditions:
Standard Deviation Levels: The script plots horizontal lines at +1, +2, -1, and -2 standard deviations. These levels provide a reference for how far the current price is from the mean, allowing traders to quickly identify when the price is moving into extreme territory.
Extreme Levels: Additional extreme levels at +3 and +4 (and their negative counterparts) are plotted to highlight areas where the price is highly likely to revert. These extreme levels provide important insight into market conditions that are far outside the norm, signaling caution or potential reversal zones.
The indicator also adapts the color shading of these extreme zones based on the Z-Score’s strength. For example, the area between +3 and +4 is shaded with a stronger color when the Z-Score approaches these values, giving a visual representation of market pressure.
Divergences: Detecting Hidden and Regular Signals
A key feature of the Savitzky-Golay Z-Score is its ability to detect bullish and bearish divergences, both regular and hidden:
Regular Bullish Divergence: This occurs when the price makes a lower low while the Z-Score forms a higher low. It signals that bearish momentum is weakening, and a bullish reversal could be near.
Hidden Bullish Divergence: This divergence occurs when the price makes a higher low while the Z-Score forms a lower low. It signals that bullish momentum may continue after a temporary pullback.
Regular Bearish Divergence: This occurs when the price makes a higher high while the Z-Score forms a lower high, signaling that bullish momentum is weakening and a bearish reversal may be near.
Hidden Bearish Divergence: This divergence occurs when the price makes a lower high while the Z-Score forms a higher high, indicating that bearish momentum may continue after a temporary rally.
These divergences are plotted directly on the chart, making it easier for traders to spot when the price and momentum are out of sync and when a potential reversal may occur.
Customization and Visualization
The Savitzky-Golay Z-Score offers a range of customization options to fit different trading styles:
Window Size and Polynomial Degree: Adjust the window size and polynomial degree of the Savitzky-Golay filter to control how much smoothing is applied to the price data.
Z-Score Lookback Period: Set the lookback period for calculating the Z-Score, allowing traders to fine-tune the sensitivity to short-term or long-term price movements.
Display Options: Choose whether to display standard deviation levels, extreme levels, and divergence labels on the chart.
Bar Color: Color the price bars based on trend direction, with green for bullish trends and red for bearish trends, allowing traders to easily visualize the current momentum.
Divergences: Enable or disable divergence detection, and adjust the lookback periods for pivots used to detect regular and hidden divergences.
Alerts and Automation
To ensure you never miss an important signal, the indicator includes built-in alert conditions for the following events:
Positive Z-Score (Long Signal): Triggers an alert when the Z-Score crosses above zero, indicating a potential buying opportunity.
Negative Z-Score (Short Signal): Triggers an alert when the Z-Score crosses below zero, signaling a potential short opportunity.
Shifting Momentum: Alerts when the Z-Score is shifting up or down, providing early warning of changing market conditions.
These alerts can be configured to notify you via email, SMS, or app notification, allowing you to stay on top of the market without having to constantly monitor the chart.
Trading Applications
The Savitzky-Golay Z-Score is a versatile tool that can be applied across multiple trading strategies:
Trend Following: By smoothing the price and calculating the Z-Score, this indicator helps traders follow the prevailing trend while avoiding false signals from short-term volatility.
Mean Reversion: The Z-Score highlights moments when the price is far from its mean, helping traders identify overbought or oversold conditions and capitalize on potential reversals.
Divergence Trading: Regular and hidden divergences between the Z-Score and price provide early warning of trend reversals, allowing traders to enter trades at opportune moments.
Final Thoughts
The Savitzky-Golay Z-Score is an advanced statistical tool designed to provide a clearer view of market trends and momentum. By applying the Savitzky-Golay filter and Z-Score analysis, this indicator reduces noise and highlights key areas where the market may reverse or accelerate, giving traders a significant edge in understanding price behavior.
Whether you’re a trend follower or a reversal trader, this indicator offers the flexibility and insights you need to navigate complex markets with confidence.
Nef33-Volume Footprint ApproximationDescription of the "Volume Footprint Approximation" Indicator
Purpose
The "Volume Footprint Approximation" indicator is a tool designed to assist traders in analyzing market volume dynamics and anticipating potential trend changes in price. It is inspired by the concept of a volume footprint chart, which visualizes the distribution of trading volume across different price levels. However, since TradingView does not provide detailed intrabar data for all users, this indicator approximates the behavior of a footprint chart by using available volume and price data (open, close, volume) to classify volume as buy or sell, calculate volume delta, detect imbalances, and generate trend change signals.
The indicator is particularly useful for identifying areas of high buying or selling activity, imbalances between supply and demand, delta divergences, and potential reversal points in the market. It provides specific signals for bullish and bearish trend changes, making it suitable for traders looking to trade reversals or confirm trends.
How It Works
The indicator uses volume and price data from each candlestick to perform the following calculations:
Volume Classification:
Classifies the volume of each candlestick as "buy" or "sell" based on price movement:
If the closing price is higher than the opening price (close > open), the volume is classified as "buy."
If the closing price is lower than the opening price (close < open), the volume is classified as "sell."
If the closing price equals the opening price (close == open), it compares with the previous close to determine the direction:
If the current close is higher than the previous close, it is classified as "buy."
If the current close is lower than the previous close, it is classified as "sell."
If the current close equals the previous close, the classification from the previous bar is used.
Delta Calculation:
Calculates the volume delta as the difference between buy volume and sell volume (buyVolume - sellVolume).
A positive delta indicates more buy volume; a negative delta indicates more sell volume.
Imbalance Detection:
Identifies imbalances between buy and sell volume:
A buy imbalance occurs when buy volume exceeds sell volume by a defined percentage (default is 300%).
A sell imbalance occurs when sell volume exceeds buy volume by the same percentage.
Delta Divergence Detection:
Positive Delta Divergence: Occurs when the price is falling (for at least 2 bars) but the delta is increasing or becomes positive, indicating that buyers are entering despite the price decline.
Negative Delta Divergence: Occurs when the price is rising (for at least 2 bars) but the delta is decreasing or becomes negative, indicating that sellers are entering despite the price increase.
Trend Change Signals:
Bullish Signal (trendChangeBullish): Generated when the following conditions are met:
There is a positive delta divergence.
The delta has moved from a negative value (e.g., -500) to a positive value (e.g., +200) over the last 3 bars.
There is a buy imbalance.
The price is near a historical support level (approximated as the lowest low of the last 50 bars).
Bearish Signal (trendChangeBearish): Generated when the following conditions are met:
There is a negative delta divergence.
The delta has moved from a positive value (e.g., +500) to a negative value (e.g., -200) over the last 3 bars.
There is a sell imbalance.
The price is near a historical resistance level (approximated as the highest high of the last 50 bars).
Visual Elements
The indicator is displayed in a separate panel below the price chart (overlay=false) and includes the following elements:
Volume Histograms:
Buy Volume: Represented by a green histogram. Shows the volume classified as "buy."
Sell Volume: Represented by a red histogram. Shows the volume classified as "sell."
Note: The histograms overlap, and the last plotted histogram (red) takes visual precedence, meaning the sell volume may cover the buy volume if it is larger.
Delta Line:
Delta Volume: Represented by a blue line. Shows the difference between buy and sell volume.
A line above zero indicates more buy volume; a line below zero indicates more sell volume.
A dashed gray horizontal line marks the zero level for easier interpretation.
Imbalance Backgrounds:
Buy Imbalance: Light green background when buy volume exceeds sell volume by the defined percentage.
Sell Imbalance: Light red background when sell volume exceeds buy volume by the defined percentage.
Divergence Backgrounds:
Positive Delta Divergence: Lime green background when a positive delta divergence is detected.
Negative Delta Divergence: Fuchsia background when a negative delta divergence is detected.
Trend Change Signals:
Bullish Signal: Green label with the text "Bullish Trend Change" when the conditions for a bullish trend change are met.
Bearish Signal: Red label with the text "Bearish Trend Change" when the conditions for a bearish trend change are met.
Information Labels:
Below each bar, a label displays:
Total Vol: The total volume of the bar.
Delta: The delta volume value.
Alerts
The indicator generates the following alerts:
Positive Delta Divergence: "Positive Delta Divergence Detected! Price is falling, but delta is increasing."
Negative Delta Divergence: "Negative Delta Divergence Detected! Price is rising, but delta is decreasing."
Bullish Trend Change Signal: "Bullish Trend Change Signal! Positive Delta Divergence, Delta Rise, Buy Imbalance, and Near Support."
Bearish Trend Change Signal: "Bearish Trend Change Signal! Negative Delta Divergence, Delta Drop, Sell Imbalance, and Near Resistance."
These alerts can be configured in TradingView to receive real-time notifications.
Adjustable Parameters
The indicator allows customization of the following parameters:
Imbalance Threshold (%): The percentage required to detect an imbalance between buy and sell volume (default is 300%).
Lookback Period for Divergence: Number of bars to look back for detecting price and delta trends (default is 2 bars).
Support/Resistance Lookback Period: Number of bars to look back for identifying historical support and resistance levels (default is 50 bars).
Delta High Threshold (Bearish): Minimum delta value 2 bars ago for the bearish signal (default is +500).
Delta Low Threshold (Bearish): Maximum delta value in the current bar for the bearish signal (default is -200).
Delta Low Threshold (Bullish): Maximum delta value 2 bars ago for the bullish signal (default is -500).
Delta High Threshold (Bullish): Minimum delta value in the current bar for the bullish signal (default is +200).
Practical Use
The indicator is useful for the following purposes:
Identifying Trend Changes:
The trend change signals (trendChangeBullish and trendChangeBearish) indicate potential price reversals. For example, a bullish signal near a support level may be an opportunity to enter a long position.
Detecting Divergences:
Delta divergences (positive and negative) can anticipate trend changes by showing a disagreement between price movement and underlying buying/selling pressure.
Finding Key Levels:
Imbalances (green and red backgrounds) often coincide with support and resistance levels, helping to identify areas where the market might react.
Confirming Trends:
A consistently positive delta in an uptrend or a negative delta in a downtrend can confirm the strength of the trend.
Identifying Failed Auctions:
Although not detected automatically, you can manually identify failed auctions by observing a price move to new highs/lows with decreasing volume in the direction of the move.
Limitations
Intrabar Data: It does not use detailed intrabar data, making it less precise than a native footprint chart.
Approximations: Volume classification and support/resistance detection are approximations, which may lead to false signals.
Volume Dependency: It requires reliable volume data, so it may be less effective on assets with inaccurate volume data (e.g., some forex pairs).
False Signals: Divergences and imbalances do not always indicate a trend change, especially in strongly trending markets.
Recommendations
Combine with Other Indicators: Use tools like RSI, MACD, support/resistance levels, or candlestick patterns to confirm signals.
Trade on Higher Timeframes: Signals are more reliable on higher timeframes like 1-hour or 4-hour charts.
Perform Backtesting: Evaluate the indicator's accuracy on historical data to adjust parameters and improve effectiveness.
Adjust Parameters: Modify thresholds (e.g., imbalanceThreshold or supportResistanceLookback) based on the asset and timeframe you are trading.
Conclusion
The "Volume Footprint Approximation" indicator is a powerful tool for analyzing volume dynamics and anticipating price trend changes. By classifying volume, calculating delta, detecting imbalances and divergences, and generating trend change signals, it provides traders with valuable insights into market buying and selling pressure. While it has limitations due to the lack of intrabar data, it can be highly effective when used in combination with other technical analysis tools and on assets with reliable volume data.
LibraryDivergenceV6LibraryDivergenceV6
Enhance your trading strategies with LibraryDivergenceV6, a comprehensive Pine Script library designed to simplify and optimize the detection of bullish and bearish divergences across multiple technical indicators. Whether you're developing your own indicators or seeking to incorporate robust divergence analysis into your trading systems, this library provides the essential tools and functions to accurately identify potential market reversals and continuations.
Overview
LibraryDivergenceV6 offers a suite of functions that detect divergences between price movements and key technical indicators such as the Relative Strength Index (RSI) and On-Balance Volume (OBV). By automating the complex calculations involved in divergence detection, this library enables traders and developers to implement reliable and customizable divergence strategies with ease.
Key Features
Comprehensive Divergence Detection
Bullish Divergence: Identifies instances where the indicator forms higher lows while the price forms lower lows, signaling potential upward reversals.
Bearish Divergence: Detects situations where the indicator creates lower highs while the price forms higher highs, indicating possible downward reversals.
Overbought and Oversold Conditions: Differentiates between standard and strong divergences by considering overbought and oversold levels, enhancing signal reliability.
Multi-Indicator Support
RSI (Relative Strength Index): Analyze momentum-based divergences to spot potential trend reversals.
OBV (On-Balance Volume): Incorporate volume flow into divergence analysis for a more comprehensive market perspective.
Customizable Parameters
Pivot Points Configuration: Adjust the number of bars to the left and right for pivot detection, allowing fine-tuning based on different timeframes and trading styles.
Range Settings: Define minimum and maximum bar ranges to control the sensitivity of divergence detection, reducing false signals.
Noise Cancellation: Enable or disable noise filtering to focus on significant divergences and minimize minor fluctuations.
Flexible Usage
Exported Functions: Easily integrate divergence detection into your custom indicators or trading strategies with exported functions such as DivergenceBull, DivergenceBear, DivergenceBullOversold, and DivergenceBearOverbought.
Occurrence Handling: Specify which occurrence of a divergence to consider (e.g., most recent, previous) for precise analysis.
Optimized Performance
Efficient Calculations: Designed to handle multiple occurrences and pivot points without compromising script performance.
Line Management: Automatically creates and deletes trend lines based on divergence conditions, ensuring a clean and uncluttered chart display.
Constance Brown RSI with Composite IndexConstance Brown RSI with Composite Index
Overview
This indicator combines Constance Brown's RSI interpretation methodology with a Composite Index and ATR Distance to VWAP measurement to provide a comprehensive trading tool. It helps identify trends, momentum shifts, overbought/oversold conditions, and potential reversal points.
Key Features
Color-coded RSI zones for immediate trend identification
Composite Index for momentum analysis and divergence detection
ATR Distance to VWAP for identifying extreme price deviations
Automatic divergence detection for early reversal warnings
Pre-configured alerts for key trading signals
How to Use This Indicator
Trend Identification
The RSI line changes color based on its position:
Blue zone (RSI > 50): Bullish trend - look for buying opportunities
Purple zone (RSI < 50): Bearish trend - look for selling opportunities
Gray zone (RSI 40-60): Neutral/transitional market - prepare for potential breakout
The 40-50 area (light blue fill) acts as support during uptrends, while the 50-60 area (light purple fill) acts as resistance during downtrends.
// From the code:
upTrendZone = rsiValue > 50 and rsiValue <= 90
downTrendZone = rsiValue < 50 and rsiValue >= 10
neutralZone = rsiValue > 40 and rsiValue < 60
rsiColor = neutralZone ? neutralRSI : upTrendZone ? upTrendRSI : downTrendRSI
Momentum Analysis
The Composite Index (fuchsia line) provides momentum confirmation:
Values above 50 indicate positive momentum
Values below 40 indicate negative momentum
Crossing above/below these thresholds signals potential momentum shifts
// From the code:
compositeIndexRaw = rsiChange / ta.stdev(rsiValue, rsiLength)
compositeIndex = ta.sma(compositeIndexRaw, compositeSmoothing)
compositeScaled = compositeIndex * 10 + 50 // Scaled to fit 0-100 range
Overbought/Oversold Detection
The ATR Distance to VWAP table in the top-right corner shows how far price has moved from VWAP in terms of ATR units:
Extreme positive values (orange/red): Potentially overbought
Extreme negative values (purple/red): Potentially oversold
Near zero (gray): Price near average value
// From the code:
priceDistance = (close - vwapValue) / ta.atr(atrPeriod)
// Color coding based on distance value
Divergence Trading
The indicator automatically detects divergences between the Composite Index and price:
Bullish divergence: Price makes lower low but Composite Index makes higher low
Bearish divergence: Price makes higher high but Composite Index makes lower high
// From the code:
divergenceBullish = ta.lowest(compositeIndex, rsiLength) > ta.lowest(close, rsiLength)
divergenceBearish = ta.highest(compositeIndex, rsiLength) < ta.highest(close, rsiLength)
Trading Strategies
Trend Following
1. Identify the trend using RSI color:
Blue = Uptrend, Purple = Downtrend
2. Wait for pullbacks to support/resistance zones:
In uptrends: Buy when RSI pulls back to 40-50 zone and bounces
In downtrends: Sell when RSI rallies to 50-60 zone and rejects
3. Confirm with Composite Index:
Uptrends: Composite Index stays above 50 or quickly returns above it
Downtrends: Composite Index stays below 50 or quickly returns below it
4. Manage risk using ATR Distance:
Take profits when ATR Distance reaches extreme values
Place stops beyond recent swing points
Reversal Trading
1. Look for divergences
Bullish: Price makes lower low but Composite Index makes higher low
Bearish: Price makes higher high but Composite Index makes lower high
2. Confirm with ATR Distance:
Extreme readings suggest potential reversals
3. Wait for RSI zone transition:
Bullish: RSI crosses above 40 (purple to neutral/blue)
Bearish: RSI crosses below 60 (blue to neutral/purple)
4. Enter after confirmation:
Use candlestick patterns for precise entry
Place stops beyond the divergence point
Four pre-configured alerts are available:
Momentum High: Composite Index above 50
Momentum Low: Composite Index below 40
Bullish Divergence: Composite Index higher low
Bearish Divergence: Composite Index lower high
Customization
Adjust these parameters to optimize for your trading style:
RSI Length: Default 14, lower for more sensitivity, higher for fewer signals
Composite Index Smoothing: Default 10, lower for quicker signals, higher for less noise
ATR Period: Default 14, affects the ATR Distance to VWAP calculation
This indicator works well across various markets and timeframes, though the default settings are optimized for daily charts. Adjust parameters for shorter or longer timeframes as needed.
Happy trading!
Smart Money Oscillator [ChartPrime]The "Smart Money Oscillator " is a premium and discount zone oscillator with BOS and CHoCH built in for further analysis of price action. This indicator works by first determining the the premium and discount zones by using pivot points and high/lows. The top of this oscillator represents the current premium zone while the bottom half of this oscillator represents the discount zone. This oscillator functionally works like a stochastic oscillator with more sophisticated upper and lower bounds generated using smart money concept theories. We have included a moving average to allow the user to visualize the currant momentum in the oscillator. Another key feature we have included lagging divergences to help traders visualize potential reversal conditions.
Understanding the concepts of Premium and Discount zones, as well as Break of Structure (BoS) and Change of Character (CHoCH), is crucial for traders using the Smart Money Oscillator. These concepts are rooted in market structure analysis, which involves studying price levels and movements.
Premium Zone is where the price is considered to be relatively high or 'overbought'. In this zone, prices have risen significantly and may indicate that the asset is becoming overvalued, potentially leading to a reversal or slowdown in the upward trend.
The Discount Zone represents a 'discount' or 'oversold' area. Here, prices have fallen substantially, suggesting that the asset might be undervalued. This could be an indicator of a potential upward reversal or a pause in the downward trend.
Break of Structure (BoS) is about the continuation of a trend. In a bullish trend, a BoS is identified by the break of a recent higher high. In a bearish trend, it's the break of a recent Lower Low. BoS indicates that the trend is strong and likely to continue in its current direction. It's a sign of strength in the prevailing trend, whether up or down.
Change of Character (CHoCH) is an indication of a potential end to a trend. It occurs when there's a significant change in the market's behavior, contradicting the current trend. For example, in an uptrend characterized by higher highs and higher lows, a CHoCH may occur if a new high is formed but then is followed by an impulsive move downwards. This suggests that the bullish trend may be weakening and a bearish reversal could be imminent. CHoCH is essentially a sign of trend exhaustion and potential reversal.
With each consecutive BoS, the signal line of the oscillator will deepen in color. This allows you to visually see the strength of the current trend. The maximum strength of the trend is found by keeping track of the maximum number of consecutive BoS's within a window of 10. This calculation excludes periods without any BoS's to allow for a more stable max.
Quick Update is a feature that implements a more aggressive algorithm to update the highs and lows. Instead of updating the pivot points exclusively to update the range levels, it will attempt to use the current historical highs/lows to update the bounds. This results in a more responsive range at the cost of stability. There are pros and cons for both settings. With Quick Update disabled, the indicator will allow for strong reversals to register without the indicator maxing out. With Quick Update enabled, the indicator will show shorter term extremes with the risk of the signal being pinned to the extremities during strong trends or large movements. With Quick Update disabled, the oscillator prioritizes stability, using a more historical perspective to set its bounds. When Quick Update is enabled, the oscillator becomes more responsive, adjusting its bounds rapidly to reflect the latest market movements.
The Scale Offset feature allows the indicator to break the boundaries of the oscillator. This can be useful when the market is breaking highs or lows allowing the user to identify extremities in price. With Scale Offset disabled the oscillator will always remain inside of the boundaries because the extremities will be updated instantly. When this feature is enabled it will update the boundaries one step behind instead of updating it instantly. This allows the user to more easily see overbought and oversold conditions at the cost of incurring a single bar lag to the boundaries. Generally this is a good idea as this behavior makes the oscillator more sensitive to recent price spikes or drops, reflecting sudden market movements more accurately. It accentuates the extremities of the market conditions, potentially offering a more aggressive analysis. The main trade-off with the Scale Offset feature is between sensitivity and potential overreaction. It offers a more immediate and exaggerated reflection of market conditions but might also lead to misinterpretations in certain scenarios, especially in highly volatile markets.
Divergence is used to predict potential trend reversals. It occurs when the price of an asset and the reading of an oscillator move in opposite directions. This discrepancy can signal a weakening of the current trend and possibly indicate a potential reversal.
Divergence doesn't always lead to a trend reversal, but it's a warning sign that the current trend might be weakening. Divergence can sometimes give false signals, particularly in strongly trending markets where the oscillator may remain in overbought or oversold conditions for extended periods. The lagging nature of using pivot points to calculate divergences means that all divergences are limited by the pivot look forward input. The upside of using a longer look forward is that the divergences will be more accurate. The obvious con here is that it will be more delayed and might be useless by the time it appears. Its recommended to use the built in divergences as a way to learn how these are formed so you can make your own in real time.
By default, the oscillator uses a smoothing of 3 to allow for a more price like behavior while still being rather smooth compared to raw price data. Conversely, you can increase this value to make this indicator behave smoother. Something to keep in mind is that the amount of delay from real time is equal to half of the smoothing period.
We have included a verity of alerts in this indicator. Here is a list of all of the available alerts: Bullish BOS, Bearish BOS, Bullish CHoCH, Bearish CHoCH, Bullish Divergence, Hidden Bullish Divergence, Bearish Divergence, Hidden Bearish Divergence, Cross Over Average, Cross Under Average.
Below are all of the inputs and their tooltips to get you started:
Settings:
Smoothing: Specifies the degree of smoothing applied to the oscillator. Higher values result in smoother but potentially less responsive signals.
Average Length: Sets the length of the moving average applied to the oscillator, affecting its sensitivity and smoothness.
Pivot Length: Specifies the forward-looking length for pivot points, affecting how the oscillator anticipates future price movements. This directly impacts the delay in finding a pivot.
Max Length: Sets the maximum length to consider for calculating the highest values in the oscillator.
Min Length: Defines the minimum length for calculating the lowest values in the oscillator.
Quick Update: Activates a faster update mode for the oscillator's extremities, which may result in less stable range boundaries.
Scale Offset: When enabled, delays updating minimum and maximum values to enhance signal directionality, allowing the signal to occasionally exceed normal bounds.
Candle Color: Enables coloring of candles based on the current directional signal of the oscillator.
Labels:
Enable BOS/CHoCH Labels: Activates the display of BOS (Break of Structure) and CHoCH (Change of Character) labels on the chart.
Visual Padding: Turns on additional visual padding at the top and bottom of the chart to accommodate labels. Determines the amount of visual padding added to the chart for label display.
Divergence:
Divergence Pivot: Defines the number of bars to the right of the pivot in divergence calculations, influencing the oscillator's responsiveness.
Divergence Pivot Forward: Directly impacts latency. Longer periods results in more accurate results at the sacrifice of delay.
Upper Range: Sets the upper range limit for divergence calculations, influencing the oscillator's sensitivity to larger trends.
Lower Range: Determines the lower range limit for divergence calculations, affecting the oscillator's sensitivity to shorter trends.
Symbol: Allows selection of the label style for divergence indicators, with options for text or symbolic representation.
Regular Bullish: Activates the detection and marking of regular bullish divergences in the oscillator.
Hidden Bullish: Enables the identification and display of hidden bullish divergences.
Regular Bearish: Turns on the feature to detect and highlight regular bearish divergences.
Hidden Bearish: Activates the functionality for detecting and displaying hidden bearish divergences.
Color:
Bullish: Determines the minimum/maximum color gradient for bullish signals, impacting the chart's visual appearance.
Bearish: Defines the minimum/maximum color gradient for bearish signals, affecting their visual representation.
Average: Specifies the color for the average line of the oscillator, enhancing chart readability.
CHoCH: Sets the color for bullish/bearish CHoCH (Change of Character) signals.
Premium/Discount: Determines the color for the premium/discount zone in the oscillator's visual representation.
Text Color: Sets the color for the text in BoS/CHoCH labels.
Regular Bullish: Defines the color used to represent regular bullish divergences.
Hidden Bullish: Specifies the color for hidden bullish divergences.
Regular Bearish: Determines the color for hidden bearish divergences.
Divergence Text Color: Specifies the color for the text in divergence labels.
RSI - 5UP Overview
The "RSI - 5UP" indicator is a versatile tool that enhances the traditional Relative Strength Index (RSI) by adding smoothing options, Bollinger Bands, and divergence detection. It provides a clear visual representation of RSI levels with customizable bands and optional moving averages, helping traders identify overbought/oversold conditions and potential trend reversals through divergence signals.
Features
Customizable RSI: Adjust the RSI length and source to fit your trading style.
Overbought/Oversold Bands: Visualizes RSI levels with intuitive color-coded bands (red for overbought at 70, white for neutral at 50, green for oversold at 30).
Smoothing Options: Apply various types of moving averages (SMA, EMA, SMMA, WMA, VWMA) to the RSI, with optional Bollinger Bands for volatility analysis.
Divergence Detection: Identifies regular bullish and bearish divergences, with visual labels ("Bull" for bullish, "Bear" for bearish) and alerts.
G radient Fills: Highlights overbought and oversold zones with gradient fills (green for overbought, red for oversold).
How to Use
1. Add to Chart: Apply the "RSI - 5UP" indicator to any chart. It works well on timeframes from 5 minutes to daily.
2. Configure Settings:
RSI Settings:
RSI Length: Adjust the period for RSI calculation (default: 14).
Source: Choose the price source for RSI (default: close).
Calculate Divergence: Enable to detect bullish/bearish divergences (default: disabled).
Smoothing:
Type: Select the type of moving average to smooth the RSI ("None", "SMA", "SMA + Bollinger Bands", "EMA", "SMMA (RMA)", "WMA", "VWMA"; default: "SMA").
Length: Set the period for the moving average (default: 14).
BB StdDev: If "SMA + Bollinger Bands" is selected, adjust the standard deviation multiplier for the bands (default: 2.0).
3.Interpret the Indicator:
RSI Levels: The RSI line (purple) oscillates between 0 and 100. Levels above 70 (red band) indicate overbought conditions, while levels below 30 (green band) indicate oversold conditions. The 50 level (white band) is neutral.
Gradient Fills: The background gradients (green above 70, red below 30) highlight overbought and oversold zones for quick reference.
Moving Average (MA): If enabled, a yellow MA line smooths the RSI. If "SMA + Bollinger Bands" is selected, green bands appear around the MA to show volatility.
Divergences: If "Calculate Divergence" is enabled, look for "Bull" (green label) and "Bear" (red label) signals:
Bullish Divergence: Indicates a potential upward reversal when the price makes a lower low, but the RSI makes a higher low.
Bearish Divergence: Indicates a potential downward reversal when the price makes a higher high, but the RSI makes a lower high.
4. Set Alerts:
Use the "Regular Bullish Divergence" and "Regular Bearish Divergence" alert conditions to be notified when a divergence is detected.
Notes
The indicator does not provide direct buy/sell signals. Use the RSI levels, moving averages, and divergence signals as part of a broader trading strategy.
Divergence detection requires the "Calculate Divergence" option to be enabled and may not work on all timeframes or assets due to market noise.
The Bollinger Bands are only visible when "SMA + Bollinger Bands" is selected as the smoothing type.
Credits
Developed by Marrulk. Enjoy trading with RSI - 5UP! 🚀
Absolute Strength Index [ASI] (Zeiierman)█ Overview
The Absolute Strength Index (ASI) is a next-generation oscillator designed to measure the strength and direction of price movements by leveraging percentile-based normalization of historical returns. Developed by Zeiierman, this indicator offers a highly visual and intuitive approach to identifying market conditions, trend strength, and divergence opportunities.
By dynamically scaling price returns into a bounded oscillator (-10 to +10), the ASI helps traders spot overbought/oversold conditions, trend reversals, and momentum changes with enhanced precision. It also incorporates advanced features like divergence detection and adaptive signal smoothing for versatile trading applications.
█ How It Works
The ASI's core calculation methodology revolves around analyzing historical price returns, classifying them into top and bottom percentiles, and normalizing the current price movement within this framework. Here's a breakdown of its key components:
⚪ Returns Lookback
The ASI evaluates historical price returns over a user-defined period (Returns Lookback) to measure recent price behavior. This lookback window determines the sensitivity of the oscillator:
Shorter Lookback: Higher responsiveness to recent price movements, suitable for scalping or high-volatility assets.
Longer Lookback: Smoother oscillator behavior is ideal for identifying larger trends and avoiding false signals.
⚪ Percentile-Based Thresholds
The ASI categorizes returns into two groups:
Top Percentile (Winners): The upper X% of returns, representing the strongest upward price moves.
Bottom Percentile (Losers): The lower X% of returns, capturing the sharpest downward movements.
This percentile-based normalization ensures the ASI adapts to market conditions, filtering noise and emphasizing significant price changes.
⚪ Oscillator Normalization
The ASI normalizes current returns relative to the top and bottom thresholds:
Values range from -10 to +10, where:
+10 represents extreme bullish strength (above the top percentile threshold).
-10 indicates extreme bearish weakness (below the bottom percentile threshold).
⚪ Signal Line Smoothing
A signal line is optionally applied to the ASI using a variety of moving averages:
Options: SMA, EMA, WMA, RMA, or HMA.
Effect: Smooths the ASI to filter out noise, with shorter lengths offering higher responsiveness and longer lengths providing stability.
⚪ Divergence Detection
One of ASI's standout features is its ability to detect and highlight bullish and bearish divergences:
Bullish Divergence: The ASI forms higher lows while the price forms lower lows, signaling potential upward reversals.
Bearish Divergence: The ASI forms lower highs while the price forms higher highs, indicating potential downward reversals.
█ Key Differences from RSI
Dynamic Adaptability: ASI adjusts to market conditions through percentile-based scaling, while RSI uses static thresholds.
█ How to Use ASI
⚪ Trend Identification
Bullish Strength: ASI above zero suggests upward momentum, suitable for trend-following trades.
Bearish Weakness: ASI below zero signals downward momentum, ideal for short trades or exits from long positions.
⚪ Overbought/Oversold Levels
Overbought Zone: ASI in the +8 to +10 range indicates potential exhaustion of bullish momentum.
Oversold Zone: ASI in the -8 to -10 range points to potential reversal opportunities.
⚪ Divergence Signals
Look for bullish or bearish divergence labels to anticipate trend reversals before they occur.
⚪ Signal Line Crossovers
A crossover between the ASI and its signal line (e.g., EMA or SMA) can indicate a shift in momentum:
Bullish Crossover: ASI crosses above the signal line, signaling potential upside.
Bearish Crossover: ASI crosses below the signal line, suggesting downside momentum.
█ Settings Explained
⚪ Absolute Strength Index
Returns Lookback: Sets the sensitivity of the oscillator. Shorter periods detect short-term changes, while longer periods focus on broader trends.
Top/Bottom Percentiles: Adjust thresholds for defining winners and losers. Narrower percentiles increase sensitivity to outliers.
Signal Line Type: Choose from SMA, EMA, WMA, RMA, or HMA for smoothing.
Signal Line Length: Fine-tune the responsiveness of the signal line.
⚪ Divergence
Divergence Lookback: Adjusts the period for detecting divergence. Use longer lookbacks to reduce noise.
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
Custom Moving Average Ribbon with EMA Table & Text ColorComprehensive Description of the Custom Moving Average Ribbon with EMA Table & Text Color
The Custom Moving Average Ribbon with EMA Table & Text Color is a highly flexible and customizable indicator designed for traders who use multiple moving averages to assess trends, strength, and potential market reversals. It plots up to 8 moving averages (either SMA, EMA, WMA, or VWMA) on the price chart and displays a table summarizing the moving averages’ values, periods, and colors. The table also allows for the customization of the text color, making it easier to align with your chart’s theme or preference.
Key Features:
Multiple Moving Averages: You can display up to 8 moving averages (MA), each of which can be customized in terms of:
Type: SMA (Simple Moving Average), EMA (Exponential Moving Average), WMA (Weighted Moving Average), or VWMA (Volume-Weighted Moving Average).
Period: Each moving average has a user-defined period, which allows for flexibility depending on your trading style (short-term, medium-term, or long-term).
Enable/Disable: Each moving average can be independently enabled or disabled based on your preference.
Moving Average Ribbon: The indicator visualizes multiple moving averages as a ribbon, giving traders insight into the market's underlying trend. The interaction between these moving averages provides essential signals:
Uptrend: Shorter-term MAs above longer-term MAs, all sloping upward.
Downtrend: Shorter-term MAs below longer-term MAs, sloping downward.
Consolidation: MAs tightly packed, indicating low volatility or a sideways market.
Customizable Table: The indicator includes a table that displays:
The Name of each moving average (e.g., MA 1, MA 2, etc.).
The Period used for each moving average.
The Current Value of each moving average.
Color Coding for easier visual identification on the chart.
Text Color Customization: You can change the text color in the table to match your chart style or to ensure high visibility.
Responsive Design: This indicator works on any time frame, whether you're a day trader, swing trader, or long-term investor, and the table adjusts dynamically as new data comes in.
How to Use the Indicator
a) Trend Identification
The Custom Moving Average Ribbon helps in identifying trends and their strength. Here’s how you can interpret the plotted moving averages:
Uptrend (Bullish):
If the shorter-term moving averages (e.g., 5-period, 10-period) are above the longer-term moving averages (e.g., 50-period, 200-period), and all the MAs are sloping upward, it suggests a strong bullish trend.
The greater the separation between the moving averages, the stronger the uptrend.
Use the table to quickly verify the current value of each MA and confirm that the price is staying above most or all of the MAs.
Downtrend (Bearish):
When shorter-term moving averages are below the longer-term moving averages and all MAs are sloping downward, this indicates a bearish trend.
Greater separation between MAs indicates a stronger downtrend.
Neutral/Consolidating Market:
If the MAs are tightly packed and frequently crossing each other, the market is likely consolidating, and a strong trend is not in play.
In these situations, it’s better to wait for a clearer signal before taking any positions.
b) Reversal Signals
Golden Cross: When a short-term moving average (e.g., 50-period) crosses above a long-term moving average (e.g., 200-period), this is considered a bullish signal, suggesting a possible upward trend.
Death Cross: When a short-term moving average crosses below a long-term moving average, it’s considered a bearish signal, indicating a potential downward trend.
c) Using the Table for Quick Reference
The table allows you to monitor:
The current price value relative to each moving average. If the price is above most MAs, the market is likely in an uptrend, and if below, in a downtrend.
Changes in MA values: If you see values of shorter-term MAs moving closer to or crossing longer-term MAs, this could indicate a weakening trend or a potential reversal.
How to Combine this Indicator with Other Indicators for a Solid Strategy
The Custom Moving Average Ribbon is powerful on its own but can be enhanced when combined with other technical indicators to form a comprehensive trading strategy.
1. Combining with RSI (Relative Strength Index)
How It Works: RSI is a momentum oscillator that measures the speed and change of price movements, typically over 14 periods. It ranges from 0 to 100, with readings above 70 considered overbought and below 30 considered oversold.
Strategy:
Overbought in an Uptrend: If the moving average ribbon indicates an uptrend but the RSI shows the market is overbought (RSI > 70), it could signal a pullback or correction is imminent.
Oversold in a Downtrend: If the moving average ribbon indicates a downtrend but the RSI shows oversold conditions (RSI < 30), a bounce or reversal may be on the horizon.
2. Combining with MACD (Moving Average Convergence Divergence)
How It Works: MACD tracks the difference between two exponential moving averages, typically the 12-period and 26-period EMAs. It generates buy and sell signals based on crossovers and divergences.
Strategy:
Trend Confirmation: Use the MACD to confirm the direction and momentum of the trend indicated by the moving average ribbon. For example, if the MACD line crosses above the signal line while the shorter-term MAs are above the longer-term MAs, it confirms strong bullish momentum.
Divergences: Watch for divergences between price action and MACD. If price is making higher highs but MACD is making lower highs, it could signal a weakening trend, which you can verify using the moving averages.
3. Combining with Bollinger Bands
How It Works: Bollinger Bands plot two standard deviations above and below a moving average, typically the 20-period SMA. The bands widen during periods of high volatility and contract during periods of low volatility.
Strategy:
Breakout or Reversal: If price action moves above the upper Bollinger Band while the shorter-term MAs are crossing above the longer-term MAs, it confirms a strong breakout. Conversely, if price touches or falls below the lower Bollinger Band and the shorter MAs start crossing below the longer-term MAs, it indicates a potential breakdown.
Mean Reversion: In sideways markets, when the moving averages are tightly packed, Bollinger Bands can help spot mean reversion opportunities (buy near the lower band, sell near the upper band).
4. Combining with Volume Indicators
How It Works: Volume is a crucial confirmation indicator for any trend or breakout. Combining volume with the moving average ribbon can enhance your strategy.
Strategy:
Trend Confirmation: If the price breaks above the moving averages and is accompanied by high volume, it confirms a strong breakout. Similarly, if price breaks below the moving averages on high volume, it signals a strong downtrend.
Divergence: If price continues to trend in one direction but volume decreases, it could indicate a weakening trend, helping you prepare for a reversal.
Example Strategies Using the Indicator
Trend-Following Strategy:
Use the moving average ribbon to identify the main trend.
Combine with MACD or RSI for confirmation of momentum.
Enter trades when the shorter-term MAs confirm the trend and the confirmation indicator (MACD or RSI) aligns with the trend.
Exit trades when the moving averages start converging or when your confirmation indicator shows signs of reversal.
Reversal Strategy:
Wait for significant crossovers in the moving averages (Golden Cross or Death Cross).
Confirm the reversal with divergence in MACD or RSI.
Use Bollinger Bands to fine-tune your entry and exit points based on overbought/oversold conditions.
Conclusion
The Custom Moving Average Ribbon with EMA Table & Text Color indicator provides a robust framework for traders looking to use multiple moving averages to gauge trend direction, strength, and potential reversals. By combining it with other technical indicators like RSI, MACD, Bollinger Bands, and volume, you can develop a solid trading strategy that enhances accuracy, reduces false signals, and maximizes profit potential in various market conditions.
This indicator offers high flexibility with customization options, making it suitable for traders of all levels and strategies. Whether you're trend-following, scalping, or swing trading, this tool provides invaluable insights into market movements.
CryptoverseThis Indicator dynamically generates and charts Pivot Points, Support and Resistance Lines, Trend Channels and even Rsi Divergences in every market and every time period.
While it helps you identify your entry points, stop loss and take positions, it certainly does not include trading signals and trading strategy.
Bonus: the indicator contains ema21, ema50, ema100 and ema200 to support the lines created. If you wish, you can change the EMA values in the settings.
Recommendation: RSI is included in the indicator codes in order to detect divergences dataally, but it is not displayed on the chart. I recommend adding an additional RSI indicator to keep track of past and current potential divergences.
USER MANUAL:
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General Settings:
Pivot Period: This field determines how many candles before and after a candle should be controlled in order to be able to determine the top and bottom points on the chart.
Support and Resistance Lines and Trend Channels formed on the chart are created by calculating the Pivot points formed according to the period determined here. (Default value: 6)
Pivot Source: Determines the pivot points to be created according to the value of the relevant candle.
(Default and Recommended: closing)
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Support And Resistance Settings:
Custom Bars Back: This area allows you to specify how many pivot points from the current candle to the previous candle to create support resistance lines on the Chart. The default value is the last 500 candles.
*Note: The more old candles are checked, the more support and resistance lines will appear. This may prevent you from making sound determinations on the chart.*
Current Bar Decrease: This field works integrated with Custom Bars Back. By subtracting the current candle by the specified number, it provides the formation of lines without including those candles.
Default value: It is set to 0 to include current data.
Example: If Custom Bars Back: 500 and Current Bar Decrease: 10, Support and Resistance lines are created by considering 500 candles before the last 10 candles without including the last 10 candles on the chart.
Show S/R Lines: This field allows you to show or hide the Support and Resistance lines at any time.
Auto Simplification: This field is marked by default. It allows the Simplification Steps value to be determined automatically within the code according to the time period and current volatility of the relevant parity. (It is recommended to use the default version.)
Simplification Steps: This field allows you to get more understandable lines by simplifying the Support and Resistance lines based on Pivot points. If a simplification is not done, the lines to be formed with only the pivot points will be too many and this creates a dirty and useless appearance on the chart.
Each 1 digit you enter as a step combines the lines that are close to each other at a value of 0.01% and creates a common line.
Example: If you enter the number 10 as Steps, it will form a single common line from lines close together, starting at 0.01% respectively. It will continue to increase by 0.02%, 0.03%, 0.04% in its next steps. For the number 10, it will complete its loop by combining lines within the last remaining lines that are as close as 0.1% to each other and creating new lines from their midpoints.
The deafult value is 14. (Max. simplifies lines with closeness up to 1.4%.)
Important Note: If Auto Simplification is on, the entered value has no meaning. The Indicator performs simplification operations automatically. If you want to manage these steps manually, you can turn off Auto Simplification and enter your own value.
S/R Lines Color: Allows you to specify the color of the lines.
Label Location: Allows you to determine how many candles ahead the information label formed for each line will be positioned.
Line Label Descriptions:
Line: It is the price value that the line coincides with.*
Distance: Shows the percentage distance of the line from the current price.
▲ : Shows the percentage distance from the line above it.
▼ : Shows the percentage distance from the line below it.
Strength: Indicates the total number of steps the process has taken during the simplification process. The height of the number indicates the strength of resistance and support in the close price range.
C. Width: stands for Channel Width. It shows the percentage value between the highest price and the lowest price on the past candle as many candles specified by Custom Bars Back.
S. Steps: stands for Simplification Steps. Indicates the number of simplification steps applied. A value of 150 in the image indicates that a 1.5% simplification range has been applied.
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Trend Channels Settings:
Show All Trend Lines: Allows you to show and hide trend channels.
Hide Old Trend Lines: If you enable it, it will hide channels created in the past except for Current Trend channels.
Helper Line Format: Allows the auxiliary line that converts a trendline to a channel to be drawn based on percentage or price.
Note: There may be cases where the auxiliary lines do not provide full parallelism when using large time intervals by preferring a percentage.
Up Trend Color: Indicates the color of the Up Trend channel.
Down Trend Color: Specifies the color of the Downtrend channel.
Show Up Trend Overflow, Show Down Trend Overflow:
When the price closes above or below the trend channels, it provides awareness with the help of a text on the chart. Colors can be adjusted according to preference.
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RSI Divergences Settings:
This indicator gives you information about 4 different divergences. You can customize the divergence views with the show and hide options.
Bullish Regular, Bullish Hidden, Bearish Regular and Bearish Hidden.
Green divergences from the bottom of the graph represent bullish, and red divergences above the graph represent bearish.
Important note: Seeing a mismatch label definitely indicates that there is a mismatch between prices and rsi, but a mismatch does not always indicate a change in price.
Potential Divergence:
The indicator not only shows you past divergences, but also informs you of potential divergences based on the current status of the chart.
A potential divergence may not turn into a true one if the price flow continues to increase or decrease in the same direction. But all divergences seen in the past must have been shown as potential divergences beforehand.
Rsi Length, Rsi Source: Allows you to change settings for RSI values typically embedded within the indicator.
Note: Pivot Source and RSI Source using the same type of candle data ensures that divergences are displayed correctly.
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EMA Settings:
The indicator allows you to use 4 different EMA data in addition to Support and Resistance lines, Trend Channels and RSI divergences. By default, 21, 50, 100 and 200 are used. You can change the EMA values and colors in the Settings section, or you can use the show hide options in the Style section.
Advanced Volatility-Adjusted Momentum IndexAdvanced Volatility-Adjusted Momentum Index (AVAMI)
The AVAMI is a powerful and versatile trading index which enhances the traditional momentum readings by introducing a volatility adjustment. This results in a more nuanced interpretation of market momentum, considering not only the rate of price changes but also the inherent volatility of the asset.
Settings and Parameters:
Momentum Length: This parameter sets the number of periods used to calculate the momentum, which is essentially the rate of change of the asset's price. A shorter length value means the momentum calculation will be more sensitive to recent price changes. Conversely, a longer length will yield a smoother and more stabilized momentum value, thereby reducing the impact of short-term price fluctuations.
Volatility Length: This parameter is responsible for determining the number of periods to be considered in the calculation of standard deviation of returns, which acts as the volatility measure. A shorter length will result in a more reactive volatility measure, while a longer length will produce a more stable, but less sensitive measure of volatility.
Smoothing Length: This parameter sets the number of periods used to apply a moving average smoothing to the AVAMI and its signal line. The purpose of this is to minimize the impact of volatile periods and to make the indicator's lines smoother and easier to interpret.
Lookback Period for Scaling: This is the number of periods used when rescaling the AVAMI values. The rescaling process is necessary to ensure that the AVAMI values remain within a consistent and interpretable range over time.
Overbought and Oversold Levels: These levels are thresholds at which the asset is considered overbought (potentially overvalued) or oversold (potentially undervalued), respectively. For instance, if the AVAMI exceeds the overbought level, traders may consider it as a possible selling opportunity, anticipating a price correction. Conversely, if the AVAMI falls below the oversold level, it could be seen as a buying opportunity, with the expectation of a price bounce.
Mid Level: This level represents the middle ground between the overbought and oversold levels. Crossing the mid-level line from below can be perceived as an increasing bullish momentum, and vice versa.
Show Divergences and Hidden Divergences: These checkboxes give traders the option to display regular and hidden divergences between the AVAMI and the asset's price. Divergences are crucial market structures that often signal potential price reversals.
Index Logic:
The AVAMI index begins with the calculation of a simple rate of change momentum indicator. This raw momentum is then adjusted by the standard deviation of log returns, which acts as a measure of market volatility. This adjustment process ensures that the resulting momentum index encapsulates not only the speed of price changes but also the market's volatility context.
The raw AVAMI is then smoothed using a moving average, and a signal line is generated as an exponential moving average (EMA) of this smoothed AVAMI. This signal line serves as a trigger for potential trading signals when crossed by the AVAMI.
The script also includes an algorithm to identify 'fractals', which are distinct price patterns that often act as potential market reversal points. These fractals are utilized to spot both regular and hidden divergences between the asset's price and the AVAMI.
Application and Strategy Concepts:
The AVAMI is a versatile tool that can be integrated into various trading strategies. Traders can utilize the overbought and oversold levels to identify potential reversal points. The AVAMI crossing the mid-level line can signify a change in market momentum. Additionally, the identification of regular and hidden divergences can serve as potential trading signals:
Regular Divergence: This happens when the asset's price records a new high/low, but the AVAMI fails to follow suit, suggesting a possible trend reversal. For instance, if the asset's price forms a higher high but the AVAMI forms a lower high, it's a regular bearish divergence, indicating potential price downturn.
Hidden Divergence: This is observed when the price forms a lower high/higher low, but the AVAMI forms a higher high/lower low, suggesting the continuation of the prevailing trend. For example, if the price forms a lower low during a downtrend, but the AVAMI forms a higher low, it's a hidden bullish divergence, signaling the potential continuation of the downtrend.
As with any trading tool, the AVAMI should not be used in isolation but in conjunction with other technical analysis tools and within the context of a well-defined trading plan.
