SMT Divergences
May 22, 2023
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The SMT Divergences indicator is a powerful tool designed to highlight SMT divergences between your chart symbol and two user-selected tickers, typically ES and YM. This innovative feature identifies discrepancies or divergences in swing points between two securities, offering traders valuable insights for making informed trading decisions.
How to Use SMT Divergences Indicator in Trading?
SMT Divergences are crucial as they spotlight diverging swing points between two securities, helping traders identify potential trading opportunities. Divergences are detected by analyzing swing points both on user chart prices and selected external tickers. When a swing point on the chart ticker aligns with one on external tickers, a comparison is made, providing an insightful divergence indication.
SETTINGS
- Swing Lookback: This setting determines the calculation window used to detect swing points, allowing customization for more precise detection.
- Comparison Ticker: Enables detection of SMT divergences between the chart prices and the selected ticker, expanding analytical capabilities.
Dashboard Features of the SMT Divergences Indicator
The SMT Divergences indicator includes a comprehensive dashboard that presents statistical data on SMT divergences.
- Show Dashboard: Toggle this to display the statistics dashboard directly on your chart, making data analysis straightforward.
- Location: Adjust where the dashboard appears on your chart to suit your analysis needs.
- Size: Customize the size of the displayed dashboard for better readability and presentation.
The dashboard reveals the frequency of SMT divergences that occur during swing highs and lows between your selected chart ticker and the external tickers. This feature offers a clear percentage indicating how often swing highs or lows lead to an SMT divergence, enhancing your trading strategy precision.
Why is the SMT Divergences Indicator Useful?
By requiring swing point confirmation (default set to 3 candles), the indicator makes it easier for traders to study price behavior accurately during SMT divergences. It’s a robust tool for understanding the price action and dynamics of multiple securities simultaneously.
FAQ
What is an SMT Divergence?
An SMT divergence occurs when swing points diverge between two securities, indicating possible shifts or movements in market trends.
How can I access the SMT Divergences Indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
Why should I use the SMT Divergences Indicator?
The indicator helps uncover hidden divergences that are not visible to the naked eye, allowing traders to capitalize on potential opportunities in the market.
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