Multi Divergence Indicator

The Multi Divergence Indicator tool provides a comprehensive framework for detecting both normal and hidden divergences between price action and several popular technical oscillators. By allowing users to toggle between different momentum and volume metrics, it assists in identifying potential trend reversals and continuations across various market conditions.

Usage

The tool displays divergence signals directly on the price chart using labeled triangles. "Normal" divergence typically suggests a potential trend reversal, while "Hidden" divergence often indicates trend continuation.

• Bullish Divergence: Indicated by upward-pointing green triangles below the bar.
  • Normal: Price makes a lower low while the oscillator makes a higher low.
  • Hidden: Price makes a higher low while the oscillator makes a lower low.
• Bearish Divergence: Indicated by downward-pointing red triangles above the bar.
  • Normal: Price makes a higher high while the oscillator makes a lower high.
  • Hidden: Price makes a lower high while the oscillator makes a higher high.

Users can experiment with different price sources (Wicks vs. Candles) to see how sensitive the detection is to extreme price points versus closing values.

Details

The script calculates divergences based on pivot points (highs and lows). It supports four distinct calculation sources:

• RSI: The standard Relative Strength Index (14-period).
• Volume: Direct raw volume data.
• %B: Derived from Bollinger Bands, representing where price is relative to the bands.
• OBV Osc: An On-Balance Volume oscillator calculated as the difference between OBV and its 20-period EMA.

The logic evaluates the relationship between the two most recent price pivots and the corresponding values of the selected oscillator at those specific times.

Settings

• Price divergence to: Selects the oscillator used for divergence comparison (RSI, Volume, %B, or OBV Osc).
• Price source: Determines whether the script looks at the highs/lows of the "Wicks" or the "Candles" (Close) to identify price pivots.

FAQ

How do I access Multi Divergence Indicator?

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 Normal and Hidden divergence?

Normal divergence is used to spot potential reversals when price and momentum lose synchronization. Hidden divergence is often used by trend followers to find entries into an existing trend when momentum overextends relative to price.

Can I set alerts for these signals?

Yes, the script includes built-in alert conditions for all four signal types (Normal Bullish, Hidden Bullish, Normal Bearish, and Hidden Bearish) which can be configured through the TradingView Alert menu.