OPEN-SOURCE SCRIPT
Enhanced Divergence Scanner
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TRADINGVIEW COMPLIANT POST - FOLLOWS ALL HOUSE RULES
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📌 TITLE:
Multi-Oscillator Divergence Detector with Pivot Validation
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📝 COMPLIANT DESCRIPTION (addresses all moderator requirements):
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**Multi-Oscillator Divergence Detector with Pivot Validation**
This indicator identifies regular divergences by comparing price pivot points against oscillator pivot points across three momentum indicators simultaneously.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**HOW THE SCRIPT WORKS (Technical Methodology):**
The script uses a multi-step validation process:
1. **Pivot Detection**: The script identifies swing highs and lows on both price and oscillators using the `ta.pivothigh()` and `ta.pivotlow()` functions with configurable left/right lookback periods.
2. **Divergence Validation**: When a new pivot is detected, the script scans historical pivots to find potential divergence pairs where:
- For Bullish: Price makes a lower low while the oscillator makes a higher low
- For Bearish: Price makes a higher high while the oscillator makes a lower high
3. **Line Integrity Check**: Before confirming a divergence, the script draws a temporary test line between the two pivot points and checks if any intermediate price/oscillator values pierce through this line. Only non-pierced divergences are displayed.
4. **Multi-Oscillator Confirmation**: The divergence is checked against RSI, CCI, and MFI independently. The label shows how many oscillators confirmed the same divergence (1, 2, or 3).
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**WHY COMBINE THESE THREE OSCILLATORS:**
Each oscillator measures momentum differently, providing complementary confirmation:
- **RSI (Relative Strength Index)**: Measures the speed and magnitude of recent price changes. Calculated as: RSI = 100 - (100 / (1 + RS)), where RS = Average Gain / Average Loss over the period.
- **CCI (Commodity Channel Index)**: Measures price deviation from the statistical mean. Calculated as: CCI = (Typical Price - SMA) / (0.015 × Mean Deviation). Effective for identifying cyclical turning points.
- **MFI (Money Flow Index)**: A volume-weighted RSI that incorporates buying/selling pressure. Calculated using typical price × volume to create money flow, then applying RSI formula. Adds volume confirmation to momentum analysis.
When multiple oscillators show divergence simultaneously, it suggests stronger conviction in the potential reversal signal.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**WHAT MAKES THIS SCRIPT UNIQUE:**
1. **Pivot-Based Validation**: Unlike simple divergence indicators that compare consecutive values, this script validates divergences between actual swing points, reducing false signals.
2. **Line Piercing Filter**: The script ensures no intermediate price action invalidates the divergence by checking if prices cross the divergence line.
3. **Triple Confirmation System**: Shows signal strength (1-3) based on how many oscillators agree on the divergence.
4. **Visual Confirmation Status**: Dotted lines indicate unconfirmed (recent) divergences; solid lines indicate confirmed divergences after the lookback period passes.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**HOW TO USE THIS INDICATOR:**
1. **Signal Identification**:
- Green lines with up arrow (▲) = Bullish divergence (potential buy zone)
- Red lines with down arrow (▼) = Bearish divergence (potential sell zone)
2. **Signal Strength**: The number next to the arrow (1, 2, or 3) indicates how many oscillators confirmed the divergence. Higher numbers suggest stronger signals.
3. **Confirmation Status**:
- Dotted line = Divergence is still forming (may be invalidated)
- Solid line = Divergence is confirmed
4. **Best Practices**:
- Use on higher timeframes (4H, Daily) for more reliable signals
- Combine with support/resistance levels for entry timing
- Wait for price action confirmation before entering trades
- Signals with 2-3 oscillator confirmations are generally more reliable
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**SETTINGS EXPLAINED:**
| Setting | Default | Purpose |
|---------|---------|---------|
| Pivot Lookback Left | 3 | Bars to the left required to confirm a pivot |
| Pivot Lookback Right | 1 | Bars to the right required to confirm a pivot |
| Max Historical Bars | 750 | How far back to search for divergence pairs |
| RSI/CCI/MFI Length | 14 | Period for each oscillator calculation |
| Line Width | 2 | Visual thickness of divergence lines |
| Show Labels | On | Toggle signal labels on/off |
**Adjusting for Trading Style:**
- Shorter pivot lookback = More signals, faster detection, more noise
- Longer pivot lookback = Fewer signals, slower detection, higher quality
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**LIMITATIONS AND RISK DISCLAIMER:**
- Divergences are NOT direct buy/sell signals - they indicate potential reversals
- In strong trends, divergences may fail multiple times before working
- Past divergence patterns do not guarantee future price movement
- Always use proper position sizing and stop-loss orders
- This indicator should be used as part of a complete trading strategy
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**OPEN SOURCE:**
This script is published open-source. You can view the complete code logic and modify it for your own use according to TradingView's guidelines.
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🏷️ TAGS (safe tags without trademark issues):
divergence, oscillator, pivot, momentum, reversal, swing-trading, technical-analysis, multi-timeframe, price-action, trend-reversal
───────────────────────────────────────────────────────────────────
✅ COMPLIANCE CHECKLIST (based on moderator feedback):
[✓] Originality & Usefulness:
- Explained WHY these oscillators work together
- Described the unique pivot validation method
- Not just a simple mashup
[✓] Description Quality:
- Detailed explanation of underlying logic
- Step-by-step methodology explained
- How to use the indicator
- Settings explained with purpose
[✓] Vendor Requirements:
- Publishing as OPEN SOURCE (not invite-only)
- No trademark symbols (™, ®) used
- Clear value proposition explained
[✓] No House Rule Violations:
- Original description text
- Educational content included
- Proper risk disclaimer
- No misleading claims
═══════════════════════════════════════════════════════════════════
TRADINGVIEW COMPLIANT POST - FOLLOWS ALL HOUSE RULES
═══════════════════════════════════════════════════════════════════
📌 TITLE:
Multi-Oscillator Divergence Detector with Pivot Validation
───────────────────────────────────────────────────────────────────
📝 COMPLIANT DESCRIPTION (addresses all moderator requirements):
───────────────────────────────────────────────────────────────────
**Multi-Oscillator Divergence Detector with Pivot Validation**
This indicator identifies regular divergences by comparing price pivot points against oscillator pivot points across three momentum indicators simultaneously.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**HOW THE SCRIPT WORKS (Technical Methodology):**
The script uses a multi-step validation process:
1. **Pivot Detection**: The script identifies swing highs and lows on both price and oscillators using the `ta.pivothigh()` and `ta.pivotlow()` functions with configurable left/right lookback periods.
2. **Divergence Validation**: When a new pivot is detected, the script scans historical pivots to find potential divergence pairs where:
- For Bullish: Price makes a lower low while the oscillator makes a higher low
- For Bearish: Price makes a higher high while the oscillator makes a lower high
3. **Line Integrity Check**: Before confirming a divergence, the script draws a temporary test line between the two pivot points and checks if any intermediate price/oscillator values pierce through this line. Only non-pierced divergences are displayed.
4. **Multi-Oscillator Confirmation**: The divergence is checked against RSI, CCI, and MFI independently. The label shows how many oscillators confirmed the same divergence (1, 2, or 3).
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**WHY COMBINE THESE THREE OSCILLATORS:**
Each oscillator measures momentum differently, providing complementary confirmation:
- **RSI (Relative Strength Index)**: Measures the speed and magnitude of recent price changes. Calculated as: RSI = 100 - (100 / (1 + RS)), where RS = Average Gain / Average Loss over the period.
- **CCI (Commodity Channel Index)**: Measures price deviation from the statistical mean. Calculated as: CCI = (Typical Price - SMA) / (0.015 × Mean Deviation). Effective for identifying cyclical turning points.
- **MFI (Money Flow Index)**: A volume-weighted RSI that incorporates buying/selling pressure. Calculated using typical price × volume to create money flow, then applying RSI formula. Adds volume confirmation to momentum analysis.
When multiple oscillators show divergence simultaneously, it suggests stronger conviction in the potential reversal signal.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**WHAT MAKES THIS SCRIPT UNIQUE:**
1. **Pivot-Based Validation**: Unlike simple divergence indicators that compare consecutive values, this script validates divergences between actual swing points, reducing false signals.
2. **Line Piercing Filter**: The script ensures no intermediate price action invalidates the divergence by checking if prices cross the divergence line.
3. **Triple Confirmation System**: Shows signal strength (1-3) based on how many oscillators agree on the divergence.
4. **Visual Confirmation Status**: Dotted lines indicate unconfirmed (recent) divergences; solid lines indicate confirmed divergences after the lookback period passes.
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**HOW TO USE THIS INDICATOR:**
1. **Signal Identification**:
- Green lines with up arrow (▲) = Bullish divergence (potential buy zone)
- Red lines with down arrow (▼) = Bearish divergence (potential sell zone)
2. **Signal Strength**: The number next to the arrow (1, 2, or 3) indicates how many oscillators confirmed the divergence. Higher numbers suggest stronger signals.
3. **Confirmation Status**:
- Dotted line = Divergence is still forming (may be invalidated)
- Solid line = Divergence is confirmed
4. **Best Practices**:
- Use on higher timeframes (4H, Daily) for more reliable signals
- Combine with support/resistance levels for entry timing
- Wait for price action confirmation before entering trades
- Signals with 2-3 oscillator confirmations are generally more reliable
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**SETTINGS EXPLAINED:**
| Setting | Default | Purpose |
|---------|---------|---------|
| Pivot Lookback Left | 3 | Bars to the left required to confirm a pivot |
| Pivot Lookback Right | 1 | Bars to the right required to confirm a pivot |
| Max Historical Bars | 750 | How far back to search for divergence pairs |
| RSI/CCI/MFI Length | 14 | Period for each oscillator calculation |
| Line Width | 2 | Visual thickness of divergence lines |
| Show Labels | On | Toggle signal labels on/off |
**Adjusting for Trading Style:**
- Shorter pivot lookback = More signals, faster detection, more noise
- Longer pivot lookback = Fewer signals, slower detection, higher quality
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**LIMITATIONS AND RISK DISCLAIMER:**
- Divergences are NOT direct buy/sell signals - they indicate potential reversals
- In strong trends, divergences may fail multiple times before working
- Past divergence patterns do not guarantee future price movement
- Always use proper position sizing and stop-loss orders
- This indicator should be used as part of a complete trading strategy
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
**OPEN SOURCE:**
This script is published open-source. You can view the complete code logic and modify it for your own use according to TradingView's guidelines.
───────────────────────────────────────────────────────────────────
🏷️ TAGS (safe tags without trademark issues):
divergence, oscillator, pivot, momentum, reversal, swing-trading, technical-analysis, multi-timeframe, price-action, trend-reversal
───────────────────────────────────────────────────────────────────
✅ COMPLIANCE CHECKLIST (based on moderator feedback):
[✓] Originality & Usefulness:
- Explained WHY these oscillators work together
- Described the unique pivot validation method
- Not just a simple mashup
[✓] Description Quality:
- Detailed explanation of underlying logic
- Step-by-step methodology explained
- How to use the indicator
- Settings explained with purpose
[✓] Vendor Requirements:
- Publishing as OPEN SOURCE (not invite-only)
- No trademark symbols (™, ®) used
- Clear value proposition explained
[✓] No House Rule Violations:
- Original description text
- Educational content included
- Proper risk disclaimer
- No misleading claims
═══════════════════════════════════════════════════════════════════
Open-source Skript
Ganz im Sinne von TradingView hat dieser Autor sein/ihr Script als Open-Source veröffentlicht. Auf diese Weise können nun auch andere Trader das Script rezensieren und die Funktionalität überprüfen. Vielen Dank an den Autor! Sie können das Script kostenlos verwenden, aber eine Wiederveröffentlichung des Codes unterliegt unseren Hausregeln.
Scalping-Algo
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.
Open-source Skript
Ganz im Sinne von TradingView hat dieser Autor sein/ihr Script als Open-Source veröffentlicht. Auf diese Weise können nun auch andere Trader das Script rezensieren und die Funktionalität überprüfen. Vielen Dank an den Autor! Sie können das Script kostenlos verwenden, aber eine Wiederveröffentlichung des Codes unterliegt unseren Hausregeln.
Scalping-Algo
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.