Signals and pivot divergences

The Signals and pivot divergences indicator is a multi-indicator analysis tool designed to identify confluence between technical signals and price-action divergences. By monitoring several oscillators and trend metrics simultaneously, it highlights high-probability reversal zones where multiple indicators align with pivot-based divergences.

Usage

The indicator can be used to identify trend exhaustion or potential reversal points. It provides two primary forms of feedback:

• Signal Confluence: The script monitors Bollinger Bands, RSI, MACD, CCI, Stochastic, and MFI. When a user-defined minimum number of these indicators produce a signal within a specific lookback window, a buy or sell label is plotted.
• Pivot Divergences: It detects regular and hidden divergences across ten different data sources, including Volume Weighted MACD (VWMACD), OBV, and Chaikin Money Flow.
• Dynamic Pivots: Users can enable "End Pivots," which create faster, real-time pivot detection before the "right length" confirmation is met, allowing for earlier entries that are later validated by standard pivots.

Details

The script operates by tracking "pivots" (highs and lows) in the price action and comparing them to the corresponding values in selected indicators. A divergence is confirmed when the price makes a higher high/lower low while the indicator fails to do so (or vice versa).

To reduce noise, the indicator includes a "Minimum number of signals" filter. For example, if set to 5, the tool will only plot a signal label if at least 5 supported indicators trigger within the "Minimum number of signals lookback" period. This ensures that signals are only shown when there is significant technical consensus.

Settings

General

• Pivot length left/right: Determines the number of bars required to confirm a pivot point.
• Source: The price data source (default is close).
• Show pivots: Toggles the visibility of confirmed pivot points on the chart.
• Different pivot in the end: Enables faster, non-confirmed pivots at the end of the chart for real-time analysis.

Signals

• Minimum number of signals: The threshold of concurrent indicator triggers required to plot a signal.
• Indicator lookback: The period used to ensure duplicate signals from the same indicator are ignored.
• Indicators (BB, RSI, MACD, etc.): Individual toggles to include or exclude specific indicators from the confluence calculation.

Divergences

• Lookback: The maximum bars between two pivots to be considered for a divergence.
• Max bars on wrong side %: A filter that invalidates divergences if the price crosses the trendline by more than a certain percentage.
• Minimum number of divergences: Requires multiple indicators to show a divergence at the same pivot to trigger a label.

FAQ

How do I use the "End Pivots" feature?

End pivots provide an early warning of a potential pivot before the "Pivot length right" requirement is met. This allows for faster reactions, though these signals may disappear if the price movement invalidates the pivot before confirmation.

Why aren't signals appearing on my chart?

Check the "Minimum number of signals" setting. If this is set high (e.g., 5 or 6), the indicator requires high confluence across many technical studies before displaying a label.

How can I access this tool?

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