RSI Divergence Signals from Price and Oscillator Pivots
Summary
This indicator identifies regular and hidden bullish or bearish divergences by comparing RSI pivot points with corresponding price highs and lows. Regular bullish signals occur when price makes a lower low while RSI makes a higher low; regular bearish signals use a higher price high and a lower RSI high. Hidden divergence conditions reverse those relationships. Users can choose the RSI input, pivot lookbacks, permitted distance between pivots, and which signal types to display.
The published configuration uses a 14-period RSI and equal left and right pivot lookbacks of five bars, with a five-to-sixty-bar range between comparisons. It includes alert conditions and a short BTC-USDT futures backtest setup, but provides no interpretable performance results. Pivot confirmation requires bars to the right of a candidate pivot, so signals are delayed; divergences are alerts for possible setups, not evidence of profitable entries. Although the description says the script alerts on divergences rather than entries, the included source also contains strategy order calls, and its entry labels appear inconsistent with the bullish and bearish conditions.
Key ideas
- The indicator compares RSI pivots with price pivots to flag divergence patterns.
- Regular bullish divergence pairs a lower price low with a higher RSI low.
- Regular bearish divergence pairs a higher price high with a lower RSI high.
- Hidden divergences and the pivot distance filter can be enabled or adjusted.
- Pivot confirmation introduces delay, and the document does not establish trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.