Real time RSI divergence

The Real time RSI divergence indicator identifies bullish and bearish divergences as soon as a candle closes, offering a faster alternative to traditional divergence indicators that wait for additional RSI pivot confirmations. This tool allows traders to spot potential trend reversals immediately upon price action breaking previous pivot levels while the RSI shows momentum exhaustion.

Usage

The indicator can be used to identify potential entry points for reversals or exit points for current trends. By monitoring the relationship between price extremes and the Relative Strength Index (RSI), users can detect when price is making a new high/low while momentum is failing to follow suit.

• Bullish Divergence: Occurs when price breaks below a previous pivot low, but the RSI value at the time of the break is higher than the RSI value recorded at the previous pivot low. This is signaled by a green upward triangle below the bar.
• Bearish Divergence: Occurs when price breaks above a previous pivot high, but the RSI value at the time of the break is lower than the RSI value recorded at the previous pivot high. This is signaled by a red downward triangle above the bar.

Traders can adjust the sensitivity of these signals by modifying the pivot lookback periods. Higher values result in fewer, more significant signals based on major price swings, while lower values provide more frequent signals based on minor price fluctuations.

Details

Unlike many divergence indicators that require a "pivot right" confirmation (waiting for several bars to pass after a high or low is formed), this script calculates divergence the moment a price level associated with a previous pivot is breached. It uses a trailing stop mechanism based on detected pivot highs and lows to define the reference points for both price and RSI values.

When the "Plot pivot lines" feature is enabled, users can visualize the trailing levels the script uses to determine when a breach has occurred, providing transparency into the calculation logic.

Settings

• Left bars: The number of bars to the left of a high or low required to define a pivot.
• Right bars: The number of bars to the right of a high or low required to define a pivot.
• RSI length: The lookback period used for the Relative Strength Index calculation.
• Plot pivot lines: Toggles the visibility of the trailing pivot levels on the chart to visualize how divergences are being calculated.

FAQ

How do I access Real time RSI divergence?

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

What makes this different from regular RSI divergence?

Traditional divergence indicators often wait for a pivot to form on the RSI itself before signaling. This script signals as soon as price breaks a previous pivot level, provided the RSI condition is met at that exact moment, leading to faster signals.

Can I set alerts for these signals?

Yes, the script includes built-in alert conditions for both bullish and bearish divergences, allowing you to receive notifications immediately upon the close of a bar where a divergence is detected.