MS & RSI Divergences

The MS & RSI Divergences indicator provides a comprehensive visual framework for analyzing market structure, momentum exhaustion, and volume distribution by identifying key swings and regular RSI divergences directly on the chart.

Usage

The Usage section describes how the script can be used to interpret price action through automated labels and volume metrics.

Market Structure

The indicator identifies pivot highs and lows to classify market structure. Traders can use these labels to determine the current trend direction:

• HH (Higher High) / HL (Higher Low): Indicates a bullish trend or continuation.
• LH (Lower High) / LL (Lower Low): Indicates a bearish trend or continuation.
• Dotted ZigZag: Visually connects confirmed swings to clarify the market's path.

RSI Divergences

The script identifies regular momentum divergences at confirmed swing points to signal potential exhaustion:

• Bearish Divergence: Price forms a higher high (HH) while the RSI forms a lower high.
• Bullish Divergence: Price forms a lower low (LL) while the RSI forms a higher low. These signals are marked with a "D" label and can be used to anticipate potential reversals or pullbacks.

Swing Volume Profile & Statistics

For every completed swing leg, the script can project a volume profile and a Point of Control (POC). This helps identify:

• High Activity Zones: Areas where the most volume was traded within a specific swing.
• Leg Stats: Displays total volume and an approximated volume delta (based on candle polarity) to gauge the strength of a price movement.

Details

The indicator uses pivot-based logic requiring a specific number of bars to the left and right for confirmation. Because of this, labels and profiles appear after the Right Bars Lookback period has passed.

The script features a dynamic update mechanism: if a stronger high or lower low appears before an opposite pivot is confirmed, the script updates the active swing to the most extreme valid point. This prevents "cluttered" charts and ensures only the most significant structural levels are maintained. The volume delta is calculated by summing volume from bullish candles as positive and bearish candles as negative within the swing duration.

Settings

Market Structure

• Left Bars Lookback: The number of bars required to the left of a pivot for it to be considered.
• Right Bars Lookback: The number of bars required to the right to confirm the pivot (affects signal lag).
• Show MS Labels: Toggles the visibility of HH, LH, HL, and LL labels.
• Show Dotted ZigZag: Toggles the connecting line between swings.

RSI Divergence

• Show Regular Divergences: Enables detection and labeling of RSI divergences.
• RSI Length: The lookback period for the RSI calculation.
• Bullish/Bearish Div Color: Customizes the color of divergence lines and "D" labels.

Swing Volume Profile

• Show Swing Volume Profiles: Toggles the horizontal volume distribution display.
• Profile Granularity (Rows): Determines how many price bins are used for the profile.
• Profile Width: Sets how far the volume bars extend to the right.
• Show Leg Stats: Toggles the text block showing Leg Volume, Delta, and POC price.
• Background Transparency: Adjusts the visibility of the profile area.

FAQ

How do I access the MS & RSI Divergences? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why do the labels appear several bars late? The indicator uses pivot confirmation logic. A swing is only confirmed once the "Right Bars Lookback" number of bars has closed without exceeding the pivot price, ensuring the structural point is valid.

Does this indicator repaint? The indicator uses a "strongest swing" logic for the active leg. While it does not repaint historical confirmed pivots, the current active label may move to a more extreme price point until a pivot in the opposite direction is confirmed.