This tool was developed to accurately capture divergences. Back-testing has shown it's relatively more accurate in detecting all types of divergences (both hidden and regular).
The tool is NOT to be used in isolation; it's best used in conjunction with moving averages (preferably the 20 MA);
1. The indicator background indicates bullish (green background color) or bearish (red background color) sentiments; 2. Indicator reversal is most bullish when price action is above MA; 3. Indicator reversal + Green background + price above MA is extremely Bullish; 4. Indicator reversal + Green background + price below MA is indicative of an incoming distribution phase; 5. Indicator reversal + Red background + price above MA is slightly bullish; 6. Indicator reversal + Red background + price above MA is indicative of an incoming accumulation period.