HTF Divergence + LTF ChoCh Signal

The HTF Divergence + LTF ChoCh Signal indicator provides a dual-layer approach to market analysis by combining higher timeframe divergence detection with lower timeframe market structure shifts. This tool is designed to identify high-probability entry points where a major trend reversal or correction is confirmed by local price action.

Usage

The indicator functions by tracking the state of a Higher Timeframe (HTF) and looking for confirmation on the current chart.

• Trend Identification: Users should set the HTF Timeframe input to a value significantly higher than the current chart (e.g., using the 4h HTF while trading on a 15m chart).
• HTF Confirmation: Monitor the bottom-right dashboard. It will display "BULL DIV" or "BEAR DIV" when a divergence is detected on the HTF RSI.
• Execution: A signal triangle ("Bull ChoCh" or "Bear ChoCh") appears when the current timeframe's price breaks the last swing high or low (Change of Character) in the direction of the HTF bias.
• Context: For optimal results, signals should be filtered using key liquidity levels such as Daily/Weekly Highs/Lows or established Supply/Demand zones.

Details

The script utilizes request.security to fetch RSI divergence data from a user-defined timeframe. It identifies pivots on both the HTF and the current chart (LTF) using a pivot lookback mechanism. A signal is generated only when:

1. An RSI divergence exists on the HTF.
2. Price on the LTF crosses over the most recent swing high (for bullish signals) or under the most recent swing low (for bearish signals).
3. The signal is fresh, meaning the state has transitioned from neutral or the opposite direction.

Settings

Higher Timeframe Settings

• HTF Timeframe: Specifies the higher timeframe used for RSI divergence detection.
• RSI Length: The lookback period used for calculating the RSI.
• HTF Pivot Lookback: The number of bars required to confirm a swing high or low on the HTF RSI. Higher values lead to more significant but fewer divergence detections.

Lower Timeframe (LTF) ChoCh Settings

• LTF Pivot Lookback: Determines the sensitivity for detecting local swing points on the current chart. A lower value makes the signals more reactive to structure breaks.

FAQ

How do I access the HTF Divergence + LTF ChoCh Signal?

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

Why is the dashboard showing "NEUTRAL"?

The dashboard displays "NEUTRAL" when the Higher Timeframe RSI has not recently formed a bullish or bearish divergence based on your "HTF Pivot Lookback" settings.

Can I use this for scalping?

Yes, the indicator is timeframe-agnostic. However, users should ensure the "HTF Timeframe" is proportionally higher than the execution timeframe (e.g., 1m execution with 15m or 1h HTF).