Detecting Regular and Hidden Divergence Across Multiple Indicators

Summary

This chart indicator scans for regular and hidden divergence between price pivots and as many as ten built-in measures, including MACD, RSI, stochastic, CCI, momentum, OBV, volume-weighted MACD, Chaikin money flow, and money flow index. An external indicator can also be supplied. Users can choose whether pivots use closes or highs and lows, set the pivot confirmation period and search limits, and select which divergence types to display. The script can draw connecting lines and labels, show indicator names or counts, and provide alerts for positive and negative divergence.

The method compares price and indicator movement between confirmed swing points, with checks along the intervening bars. It is a signal-visualization tool rather than a complete entry, exit, or risk-management strategy, and the document gives no performance results. Pivot confirmation requires bars on both sides of a candidate point, so signals can be delayed; disabling confirmation may change that behavior. Divergence identifies a mismatch in movement, not a guaranteed reversal.

Key ideas

• The indicator checks regular and hidden divergence at price swing highs and lows.
• It can compare price pivots with several built-in indicators or an external series.
• Pivot periods and search limits control which prior swing points are examined.
• Chart labels, divergence lines, and alert conditions help surface detected signals.
• The tool does not specify a trading or risk-management plan, and divergence is not a reversal guarantee.

Tags

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