RSI Divergence (Regular + Hidden)

The RSI Divergence (Regular + Hidden) indicator is a comprehensive visual analysis tool that identifies four distinct types of divergence between price action and the Relative Strength Index (RSI). It aims to highlight potential trend exhaustion or continuation by tracking confirmed swing highs and lows on both the price chart and the RSI oscillator.

Usage

The script is designed for visual confirmation of price-momentum discrepancies. It detects:

• Regular Bullish Divergence: Occurs when price makes a lower low while RSI makes a higher low. This often suggests weakening bearish momentum.
• Regular Bearish Divergence: Occurs when price makes a higher high while RSI makes a lower high, suggesting weakening bullish momentum.
• Hidden Bullish Divergence: Occurs when price makes a higher low but RSI makes a lower low, often studied as a sign of trend continuation in an uptrend.
• Hidden Bearish Divergence: Occurs when price makes a lower high but RSI makes a higher high, often viewed as a sign of trend continuation in a downtrend.

Users can toggle the visibility of regular and hidden divergences separately to focus on specific market structures.

Details

The indicator utilizes the ta.pivothigh() and ta.pivotlow() functions to define swings. To ensure signals are stable and do not repaint, a divergence is only plotted once a pivot is fully confirmed based on the "Right Swing Bars" parameter. The script tracks the two most recent confirmed pivots for both price and RSI, applying a minimum bar distance filter to reduce noise and ensure the divergence is meaningful over a specific time window.

Settings

RSI Settings

• RSI Source: Determines the price data used for the RSI calculation (default is Close).
• RSI Length: Sets the period for the RSI calculation (default is 14).

Swing / Pivot Settings

• Left Swing Bars: The number of bars required to the left of a candle for it to be considered a pivot.
• Right Swing Bars: The number of bars required to the right to confirm a pivot. Higher values result in more lag but more significant swing points.

Divergence Filters

• Min Bars Between Swings: The minimum horizontal distance required between two pivots to qualify for divergence.
• Min RSI Difference: The minimum vertical distance required between the two RSI pivot values to filter out minor fluctuations.

Visibility & Alerts

• Show Regular/Hidden Divergence: Toggles for different divergence types.
• Show Lines/Labels: Toggles for the visual drawings on the chart.
• Enable Alerts: Activates the built-in alert conditions for all four divergence types.

FAQ

How do I access the RSI Divergence (Regular + Hidden) indicator?

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

Does this indicator repaint?

No. The indicator waits for the "Right Swing Bars" to close to confirm a pivot point before identifying and drawing the divergence, ensuring the signals are stable on historical data.

Can I use this for automated trading signals?

While the script includes alerts, it is designed primarily as a visual analysis tool. Traders typically use these signals in conjunction with other technical analysis methods like support/resistance levels and trend filters.