Divergence for Many [v5]

The Divergence for Many indicator is a comprehensive technical analysis tool that scans for regular divergences across 18 different oscillators and indicators simultaneously. It aims to provide traders with a high-probability reversal detection system by aggregating signals from multiple momentum, volume, and volatility sources.

Usage

The script functions by identifying pivot points in price action and comparing them with the corresponding values of the selected indicators. A bullish divergence is identified when price makes a lower low while the indicator makes a higher low, whereas a bearish divergence occurs when price makes a higher high while the indicator makes a lower high.

Key Usage Tips:

• Indicator Selection: You can toggle 18 individual indicators, including MACD, RSI, Stochastic, CCI, Momentum, OBV, VWMA-MACD, CMF, MFI, Williams Vix Fix, Stochastic RSI, SMI Ergodic Oscillator, Bull Bear Power, and Balance of Power.
• External Input: Use the "External Indicator" option to connect any other indicator on your chart to the divergence engine.
• Filters: Enhance signal quality using the built-in Volume Weighted MACD MTF filter, MFI MTF filter, and ATR volatility filters to avoid trading in low-momentum environments.
• Backtesting: The script is built as a strategy, allowing you to optimize SL/TP percentages and filter settings for specific assets like crypto tokens.

Details

This tool is based on the concepts originally developed by LonesomeTheBlue and CannyTolany01, updated to Pine Script v5 with significant additions. It utilizes a non-repainting multi-timeframe function (f_security) to ensure that filter data from higher timeframes is processed accurately without future-leakage. The divergence engine checks up to a user-defined number of pivot points and bars back to find valid structural mismatches between price and momentum.

Settings

Main Divergence Settings

• Pivot Period: Sets the number of bars used to identify local highs and lows.
• Source for Pivot Points: Choose between Close prices or High/Low prices for detection.
• Maximum Bars to Check: The lookback window for identifying divergence legs.
• Don't Wait for Confirmation: If enabled, signals appear as soon as the pivot is identified rather than waiting for price action to confirm the turn.

Filters

• ATR Filter: Filters signals based on the ratio between fast and slow ATR to ensure sufficient volatility.
• MTF Filters: Includes Momentum, MFI, and VW-MACD filters that can be set to higher timeframes to ensure trade alignment with the broader trend.
• SuperTrend/CCI/Volume Filters: Optional secondary trend and volume confirmation layers.

Risk Management

• Static SL/TP: Allows users to set fixed percentage-based Stop Loss and Take Profit levels.
• Long/Short Toggle: Enables users to run the strategy for only one direction, which is recommended for separate bot optimization.

FAQ

How do I use an external indicator with this tool?

Add your desired indicator to the chart, then in the "Divergence for Many" settings, select the "External Indicator" option and pick the specific plot from the external script you wish to analyze for divergences.

Why do some signals disappear or appear late?

By default, the script waits for pivot confirmation to ensure accuracy. You can disable "Wait for Confirmation" in the settings, though this may lead to "repainting" where a signal disappears if a new price extreme is reached immediately after.

How can I access Divergence for Many?

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