SMT Divergence & ICT Killzones

The SMT Divergence & ICT Killzones indicator is a comprehensive technical analysis tool that combines multi-asset correlation analysis with algorithmic session timing and daily reference levels. It helps traders identify institutional footprints by highlighting SMT-style divergences alongside ICT killzone windows and the Midnight Open reference price.

Usage

This tool is designed to provide a unified workflow for traders following smart money concepts. Users can monitor SMT (Smart Money Technique) divergences, which occur when two correlated assets (such as BTC and ETH or EURUSD and GBPUSD) fail to confirm the same swing highs or lows.

A practical implementation involves:

• Correlation Review: Comparing the chart symbol with a related market to find price action discrepancies at key swing points.
• Session Context: Using the London and New York killzone backgrounds to filter for high-probability setups during peak liquidity hours.
• Bias Confirmation: Observing if divergences occur near the Midnight Open level to assess daily directionality.

Details

The script utilizes confirmed pivot points to detect SMT conditions. Unlike simple oscillator-based divergences, this implementation compares the structure of two distinct symbols. When the primary chart symbol makes a higher high but the correlation symbol fails to do so, a bearish SMT is identified. Conversely, if the chart symbol makes a lower low while the comparison symbol makes a higher low, a bullish SMT is marked.

The tool includes a dynamic box drawing system for future session projections and manages historical objects to prevent chart clutter. The logic is optimized for standard candlestick charts, as non-standard price constructions (like Heikin Ashi) may distort pivot validation.

Settings

Main Logic

• Correlation Symbol: Selects the secondary market used for divergence comparison.
• SMT Timeframe: Sets the timeframe for the comparison symbol (should match the chart timeframe).
• Swing Length: Determines the sensitivity of pivot confirmation; higher values require more bars for validation.
• Pivot History Limit: Controls the number of previous pivots stored for SMT pairing.
• Max Pivot Span Bars: Sets the maximum bar distance allowed between two pivots for a valid SMT.
• Require Correlation Reversal: When enabled, strictly requires the correlation symbol to reverse; when disabled, equal highs/lows also qualify.

ICT & Time Settings

• Show Killzones: Toggles the London and New York session backgrounds.
• Show Midnight Open: Displays the daily Midnight Open reference line.
• Midnight Timezone: Configures the timezone used for calculating the daily open.

Visuals

• Signal Colors: Customizes the visual output for bullish and bearish SMT markings.
• Outside Killzone Transparency: Increases the transparency of signals that occur outside of active sessions.
• Max Historical Objects: Limits the total number of lines and labels preserved on the chart.

FAQ

How do I access the SMT Divergence & ICT Killzones? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why do signals appear late? Signals are based on confirmed swing pivots defined by the Swing Length setting; they appear once the required number of bars has passed to validate the peak or trough.

Can I use this for any asset class? Yes, as long as you use a correlation symbol that has a meaningful relationship with the chart symbol (e.g., indices, correlated forex pairs, or crypto assets).