Momentum and volume
RSI Divergence
Detects all four divergence types from confirmed pivots, so a line that prints does not vanish later.
Divergence occurs when price and momentum disagree. Price makes a higher high while the oscillator does not, or the reverse. The weakness in most divergence tools is that they draw from unconfirmed pivots, so a line appears, a trade is taken, and the line disappears once later bars invalidate the pivot.
Here the pivot has to confirm before anything is drawn. Fewer lines appear, they appear a few bars after the extreme, and they stay where they were drawn. All four types are covered: regular and hidden, bullish and bearish, with the hidden pair switched off by default.
Minimum and maximum spacing between pivots keeps the comparison sensible, so a divergence is not claimed between two points sixty bars and one trend apart.
How to read it
- Regular divergence argues for exhaustion. Hidden divergence argues for continuation.
- Divergence at a known level carries more weight than divergence in open space.
- Shorten the pivot lengths for more signals on fast charts, lengthen them for fewer and cleaner ones.
Questions
Why does the line appear a few bars late?
Because the pivot must confirm first. That delay is the reason the line does not disappear afterwards.
Can I turn hidden divergence on?
Yes. Both hidden types are available and default to off, since they suit continuation trading rather than reversal trading.
Related
Trend Surge
Classifies the market as bullish, bearish or chop, using a threshold that adapts to each...
Volume Pulse
Flags abnormal volume against the symbol's own baseline, adjusted for time of day, with a...
Free, no signup
All 15 GapAlgo indicators are public on TradingView. Add them to a chart and they work.
Get RSI Divergence