Divergence RVI

The Divergence RVI indicator automatically identifies and plots regular and hidden divergences between the Relative Vigor Index (RVI) and price action to help traders spot potential trend reversals and continuations.

Usage

The indicator scans for discrepancies between the RVI oscillator and price movements based on pivot points. It displays labels on the oscillator pane to signal specific types of market conditions:

• Regular Bullish Divergence ("D" Label): Occurs when the price makes a lower low while the RVI makes a higher low. This often suggests a potential upward reversal.
• Hidden Bullish Divergence ("H" Label): Occurs when the price makes a higher low while the RVI makes a lower low, typically signaling a trend continuation.
• Regular Bearish Divergence ("D" Label): Occurs when the price makes a higher high while the RVI makes a lower high, indicating a possible downward reversal.
• Hidden Bearish Divergence ("H" Label): Occurs when the price makes a lower high while the RVI makes a higher high, often suggesting a bearish trend continuation.

Details

The Relative Vigor Index (RVI) measures the conviction of a current price trend by comparing the closing price to its trading range. This script calculates the RVI using a 10-period lookback and applies a four-bar symmetrical weighted moving average to smooth the output. Divergences are calculated by comparing current pivot highs and lows against previous ones within a user-defined lookback range. If the oscillator movement contradicts price movement at these pivot points, a signal is generated.

Settings

• Pivot Lookback Right: Sets the number of bars required to the right of a pivot point to confirm it.
• Pivot Lookback Left: Sets the number of bars required to the left of a pivot point to identify it.
• Max of Lookback Range: The maximum number of bars to look back for a previous pivot to compare for divergence.
• Min of Lookback Range: The minimum number of bars required between pivots for a divergence to be valid.
• Plot Bullish: Toggles the visibility of Regular Bullish divergence signals.
• Plot Hidden Bullish: Toggles the visibility of Hidden Bullish divergence signals.
• Plot Bearish: Toggles the visibility of Regular Bearish divergence signals.
• Plot Hidden Bearish: Toggles the visibility of Hidden Bearish divergence signals.

FAQ

How do I access Divergence RVI?

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

What is the difference between "D" and "H" labels?

"D" stands for Divergence (Regular), which typically indicates a potential reversal of the current trend. "H" stands for Hidden Divergence, which typically indicates a continuation of the existing trend.

Can I set alerts for these signals?

Yes, the script includes built-in alert conditions for all four types of divergences, which can be configured to trigger when a signal is confirmed at the close of a bar.