By automatically detecting positive and negative divergences, this indicator plays a critical role in identifying potential market reversal points and changes in price momentum. Divergence data is displayed both visually on the chart and in a dedicated information panel outside the price chart, making it easier for traders to monitor and analyze market conditions.
You can access the Indicator from this link:
https://tradingfinder.com/products/i...r-rsi-macd-ao/
You can access the Indicator on the TradingView website:
https://www.tradingview.com/script/2...AO-Oscillator/
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Key Features of the Divergence Detector Indicator
- Multi-Oscillator Support: Works with MACD, RSI, and AO for comprehensive divergence analysis.
- Automatic Divergence Detection: Identifies bullish and bearish divergences without manual analysis.
- Visual Representation: Displays divergence lines outside the main chart for clearer interpretation.
- Divergence Information Table: Summarizes real-time divergence data for quick decision-making.
- Phase Change Detection: Identifies changes between two oscillating peaks.
- Supports Multiple Trading Styles: Suitable for both intraday and swing trading strategies.
- Multi-Timeframe Compatibility: Works across different chart timeframes.
Indicator Categories
- Oscillators TradingView Indicators
- Signal & Forecast TradingView Indicators
- Trading Assist TradingView Indicators
- Reversal TradingView Indicators
- Multi-Timeframe TradingView Indicators
- Intraday and Swing TradingView Indicators
How the Divergence Detector Indicator Works
The Divergence Information Table provides traders with critical real-time data, including:
- Type of Divergence – Bullish or Bearish
- Existence Indicator – Displays “+” if divergence is present
- Consecutive Count – Number of consecutive divergences detected
- Divergence Quality – Based on consecutive occurrences and reliability
- Change Phase Indicator – Signals phase shifts between oscillator peaks
Performance in Different Market Conditions
1. Uptrend Analysis (Bullish Divergence)
- Example: On the Bitcoin (BTC) 1-hour chart, price formed lower highs (LH) while the MACD divergence line showed higher lows (HL).
- This bullish divergence indicated a potential buying opportunity before the price resumed its upward movement.
2. Downtrend Analysis (Bearish Divergence)
- Example: On the USD/CAD 4-hour chart, price formed higher highs (HH), while the oscillator displayed lower highs (LH).
- This bearish divergence signaled the likely end of an uptrend and the start of a downtrend, providing a potential selling opportunity.
Indicator Settings
- Fractal Periods – Defines the number of bars used to detect divergence peaks (Default: 4).
- Divergence Detection Method – Select between MACD, RSI, or AO for analysis.
- Show Table – Option to display or hide the divergence information table.
- Show Labels – Enable or disable labels marking divergence points on the chart.
Conclusion
The Divergence Detector Indicator (MACD, RSI, AO) is a highly effective technical analysis tool for traders seeking to identify and validate market reversal signals.
By combining three oscillators, it offers a multi-layered approach to divergence detection, ensuring higher accuracy and stronger trade confirmations. Its visual alerts, combined with the divergence information table, provide traders with the insights needed to execute trades with confidence across forex, cryptocurrency, stocks, commodities, and indices.
This makes it an essential component for traders who rely on technical indicators to time their entries and exits with precision.
