UFO + Realtime Divergences (UO x MFI)

The UFO + Realtime Divergences indicator is a hybrid momentum tool that combines the Ultimate Oscillator (UO) and the Money Flow Index (MFI) to identify high-quality divergence signals and trend reversals. By blending volume-weighted data with multi-timeframe momentum analysis, it provides a smoothed yet responsive oscillator suitable for various market conditions and scalping strategies.

Usage

The indicator can be used to identify potential trend exhaustion through regular divergences or trend continuation through hidden divergences. Traders typically look for:

• Regular Bullish/Bearish Divergences: Signal potential reversals when price and the oscillator move in opposite directions.
• Hidden Bullish/Bearish Divergences: Signal potential trend continuation.
• Centerline Crossovers: The oscillator crossing the 50 level indicates a shift in momentum bias.
• MTF Confluence: The ribbon at the top/bottom of the panel displays overbought (OB) and oversold (OS) conditions across three different timeframes using Stochastic RSI or CCI, helping traders confirm entries with higher timeframe alignment.

Details

The core calculation of the UFO is an average of the Ultimate Oscillator and the Money Flow Index.

• Ultimate Oscillator (UO): Measures momentum across three different timeframes to reduce false divergence signals often found in single-period oscillators.
• Money Flow Index (MFI): Often referred to as "Volume-Weighted RSI," it incorporates price and volume to identify buying and selling pressure.
• Divergence Logic: The script uses a pivot-based detection system that identifies swing highs and lows on both price and the oscillator. Users can choose to display lines only after confirmation or in real-time.

Settings

UO Settings

• Fast/Middle/Slow Length: Adjusts the three lookback periods used for the Ultimate Oscillator calculation.

MFI Settings

• MFI Length: Sets the lookback period for the Money Flow Index component.
• MFI Source: Determines the price data used (e.g., HLC3).

Divergence Settings

• Show Divergence Lines: Toggles the visibility of detected divergence paths.
• Don't Wait for Confirmation: If enabled, signals appear earlier but may be more prone to repainting until the pivot is confirmed.
• Divergence Type: Choose between Regular, Hidden, or both.

Details & MTF

• Enable MTF Ribbon: Displays the triple-timeframe Stochastic RSI or CCI confluence at the top/bottom.
• Select Alternate Timeframe: Allows the entire oscillator to be calculated based on a different timeframe than the current chart.
• Pivot Period: Controls the sensitivity of the divergence detection by adjusting how many bars are required to form a swing high or low.

FAQ

How do I interpret the MTF Ribbon? The ribbon turns green when all three selected timeframes are in an oversold state and red when they are all overbought. This provides a high-confluence signal for potential reversal zones.

Can I set alerts for specific divergences? Yes, the indicator supports alerts for regular and hidden divergences, as well as centerline crossovers, which can be configured through the TradingView alert menu.

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