Ultimate Oscillator Divergence Detector v0.1

The Ultimate Oscillator Divergence Detector v0.1 indicator is a technical analysis tool designed to identify bullish divergence patterns between price action and the Ultimate Oscillator (UO).

Usage

The tool focuses on identifying normal bullish divergences, which occur when the price records lower lows while the Ultimate Oscillator records higher lows. This discrepancy often signals a potential reversal or a weakening of bearish momentum.

To use the indicator effectively, traders should monitor the background highlights which appear when a bullish divergence is detected. The "Spacing" parameter is critical for adjusting the sensitivity of the detection algorithm to different market conditions:

• Intraday/Small Timeframes: A lower spacing value (around 3) is typically more effective for capturing fast-moving price pivots.
• Swing/Higher Timeframes: A higher spacing value (around 7 to 10) helps filter out noise and identifies more significant structural divergences.

Details

The indicator utilizes the Ultimate Oscillator, which calculates momentum across three different timeframes to reduce the volatility and false signals common in single-period oscillators. The divergence detection logic segments price data based on the user-defined spacing to find relative lows in both price and the oscillator. By comparing the directional slope of these identified lows, the script determines if a bullish divergence is present.

Settings

• Spacing: Determines the lookback window for identifying local price and oscillator segments. Smaller values increase sensitivity, while larger values focus on broader structural pivots.
• Length 7: The short-term period for the Ultimate Oscillator calculation.
• Length 14: The intermediate-term period for the Ultimate Oscillator calculation.
• Length 28: The long-term period for the Ultimate Oscillator calculation.

FAQ

How do I access Ultimate Oscillator Divergence Detector v0.1?

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

What types of divergence does this version support?

Currently, version 0.1 specifically supports normal bullish divergences.

Why are no signals appearing on my chart?

If no signals are appearing, try adjusting the "Spacing" parameter. A value that is too high might overlook smaller divergences, while a value that is too low might be too sensitive for higher timeframe trends.