Detecting Price and Oscillator Divergences with a Configurable Indicator

Summary

This indicator marks price extremes and compares them with an oscillator to identify divergence. It connects the selected extremes with segments, and can draw support and resistance rays and channels through them. The user chooses among a broad set of oscillators, including RSI, MACD, stochastic, momentum, and price or volume series; RSI is the default selection.

Its settings control bullish and bearish divergence, hidden divergence, extreme detection, how many steps are displayed, and optional trend lines and channels. The description lists adjustable parameters but gives no examples, validation, or performance evidence, so it explains the tool’s available functions rather than establishing that its signals are profitable. Divergence markers depend on the chosen oscillator, its settings, and the method used to identify highs and lows. The document also does not define entry, exit, or risk rules; traders would need to test those choices independently.

Key ideas

• The indicator detects divergence by comparing price extremes with a selected oscillator.
• Users can choose from multiple oscillators, with RSI set as the default.
• It can display bullish, bearish, and hidden divergence, along with support and resistance rays.
• Settings affect extreme detection, the displayed history, and optional channels.
• The description provides no evidence that the indicator’s signals generate profitable trades.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.