Multi Oscillator Divergence Indicator

The Multi Oscillator Divergence Indicator tool provides a comprehensive environment for detecting regular and hidden divergences between price and six popular technical oscillators. It serves as a versatile solution for identifying potential trend reversals or continuations by streamlining divergence analysis across multiple momentum and volume-based metrics.

Usage

The tool can be used to identify trend exhaustion (regular divergence) or trend strength (hidden divergence). Users can select the specific oscillator they wish to analyze from the settings menu to tailor the detection to their specific strategy.

• Regular Bullish Divergence: Occurs when price makes a lower low but the oscillator makes a higher low. This suggests a potential upward reversal.
• Hidden Bullish Divergence: Occurs when price makes a higher low but the oscillator makes a lower low. This often suggests trend continuation.
• Regular Bearish Divergence: Occurs when price makes a higher high but the oscillator makes a lower high. This suggests a potential downward reversal.
• Hidden Bearish Divergence: Occurs when price makes a lower high but the oscillator makes a higher high. This often suggests trend continuation.

Details

The indicator calculates pivot points on the selected oscillator and compares them to the corresponding price pivots within a user-defined lookback window. The inclusion of volume-based oscillators like the Demand Index and Chaikin Money Flow allows traders to identify divergences not just in price momentum, but also in buying and selling pressure.

The available oscillators include:

• Relative Strength Index (RSI)
• Moving Average Convergence Divergence (MACD)
• Stochastic
• Money Flow Index (MFI)
• Demand Index
• Chaikin Money Flow (CMF)

Settings

• Select Oscillator: Chooses the primary calculation source (RSI, MACD, Stochastic, etc.).
• Pivot Lookback Right: Sets the number of bars to the right required to confirm a pivot point.
• Pivot Lookback Left: Sets the number of bars to the left required to confirm a pivot point.
• Max of Lookback Range: The maximum number of bars allowed between two pivots to qualify for a divergence.
• Min of Lookback Range: The minimum number of bars required between two pivots to qualify for a divergence.
• Plot Bullish/Hidden Bullish/Bearish/Hidden Bearish: Toggles the visibility of specific divergence types on the chart.

FAQ

How do I access Multi Oscillator Divergence Indicator?

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

Which oscillator is best for divergence?

The "best" oscillator depends on market conditions; RSI is widely used for momentum, while Chaikin Money Flow or Demand Index may be better for identifying volume-based shifts.

Does this indicator repaint?

Because it relies on pivot points, the signals will appear with a small delay equal to the "Pivot Lookback Right" setting once the pivot is confirmed. This is standard for technical divergence detection to ensure accuracy.