Ultimate Oscillator + Realtime Divergences

The Ultimate Oscillator + Realtime Divergences indicator provides a feature-rich implementation of the classic momentum tool designed to measure buying and selling pressure across three different timeframes. By combining multiple lookback periods, this tool aims to filter out the false divergence signals common in single-timeframe oscillators, offering a more stable representation of market momentum and potential trend reversals.

Usage

The indicator can be used to identify trend momentum shifts, overbought/oversold conditions, and potential price reversals through divergences.

• Divergence Detection: The script automatically identifies and draws Regular and Hidden divergences. Regular divergences typically suggest trend reversals, while Hidden divergences suggest trend continuation.
• Timeframe Analysis: Users can set an alternate timeframe to view UO data from a higher or lower timeframe directly on their current chart.
• Alerting: Integrated alerts notify users of centerline crossovers and confirmed divergence patterns.
• Visual Confluence: Optional background coloring can highlight when the oscillator is above or below the 50 centerline, providing an immediate visual cue for the prevailing trend.

Details

The Ultimate Oscillator (UO) was developed by Larry Williams to account for the limitations of other momentum oscillators. It uses weighted averages of three different periods (standard: 7, 14, and 28) to smooth out fluctuations. This implementation enhances the core calculation with a real-time divergence engine that scans for pivot highs and lows.

A unique "Heikin Ashi" mode is included, which utilizes the Heikin Ashi formula for Open and Close values to produce a smoother oscillator line, specifically useful for traders who prefer trend-following strategies on volatile assets.

Settings

Divergence Settings

• Show Divergence Lines: Toggles the visibility of divergence lines on the oscillator.
• Show Only Last Divergence: When enabled, only the most recent divergence remains visible.
• Don't Wait for Confirmation: Allows for faster, real-time divergence detection before the pivot point is fully confirmed.
• Divergence Type: Filter between Regular, Hidden, or both types of divergences.

UO Settings

• Fast/Middle/Slow Length: Adjusts the three lookback periods used in the UO calculation.
• Flip Oscillator: Inverts the oscillator values (useful for use with TradingView's "Flip Chart" feature).

Pivot Point Settings

• Pivot Period: Determines the sensitivity of the pivot highs and lows used for divergence.
• Maximum Pivot Periods to Check: Sets how many previous pivots are evaluated for potential divergences.
• Maximum Bars to Check: The maximum historical lookback for divergence scanning.

FAQ

How do I access Ultimate Oscillator + Realtime Divergences?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What is the difference between Regular and Hidden divergences?

Regular divergences indicate a potential trend reversal (e.g., price makes a lower low while the oscillator makes a higher low), whereas Hidden divergences indicate potential trend continuation.

Can I use this on any timeframe?

Yes, the indicator is compatible with all timeframes, and you can even utilize the "Alternate Timeframe" setting to overlay data from a different periodicity onto your current chart.