Smoothed Divergence For Many Indicators | LUPEN

há 7 horas

Indicator Guide: Smoothed Divergence For Many Indicators.


1. What is this Indicator?
'Smoothed Divergence For Many Indicators by LUPEN' is a powerful multi-functional tool designed to detect market reversals and trend continuations. It analyzes the relationship between Price Action and a selected Oscillator (like RSI, MACD, Stochastic, etc.) to identify "Divergences".

Unlike standard indicators that only show you the current value, this tool looks back at history, finds peaks and valleys (pivots), and draws lines connecting them to highlight discrepancies between momentum and price.

2. Key Concepts: The Two Types of Signals
A. Regular Divergence (Reversal Signal) -> R
This occurs when the price trend and the oscillator trend move in opposite directions. It suggests the current trend is losing momentum and a reversal is likely.

Bullish Regular Divergence (Buy Signal):
Price: Makes a Lower Low.
Oscillator: Makes a Higher Low.
Meaning: Sellers are pushing price down, but with less strength than before. Buyers are stepping in.
Visual: A Solid Green line drawn below the price.



Hidden Divergence (Trend Continuation) -> H
This occurs during a pullback in an existing trend. It signals that the main trend is still strong and likely to resume.
Bullish Hidden Divergence (Buy Signal):
Price: Makes a Higher Low (in an uptrend).
Oscillator: Makes a Lower Low.
Meaning: The oscillator cooled off significantly, but price held up well. This "hidden" strength suggests the uptrend will continue.
Visual: A Dashed Blue line drawn below the price.



Bearish Hidden Divergence (Sell Signal):
Price: Makes a Lower High (in a downtrend).
Oscillator: Makes a Higher High.
Meaning: The oscillator rallied hard, but price couldn't break the previous high. This weakness suggests the downtrend will resume.
Visual: A Dashed Orange line drawn above the price.




How to Trade With It
Select Your Oscillator:
Go to the settings and choose your preferred oscillator from the list (RSI is the default and most common).
Tip: RSI is great for general purpose. MACD or OsMA are excellent for trend-following. CCI is good for detecting extremes.
Confirm the Trend:
Look at the chart context. Is the market trending up or down?
If Trending UP: Look primarily for Hidden Bullish (continuation) or wait for Regular Bearish at major resistance levels.




If Trending DOWN: Look for Hidden Bearish (continuation) or Regular Bullish at major support.




Wait for the Signal:
"R" Label: Indicates a Regular divergence (Reversal). Be ready for a potential change in trend direction.
"H" Label: Indicates a Hidden divergence (Continuation). This is often a high-probability entry point to join an existing trend.


T3 Smoothing (Optional but it's the core of the indicator):
The indicator includes a "T3 Smoothing" feature enabled by default. This smooths out the jagged lines of the oscillator to reduce false signals.
Adjustment: If you find the signals are too slow, you can turn off Use T3 Smoothing in the settings to see the raw oscillator data.

Combine with Support/Resistance: A Regular Bullish Divergence that appears exactly at a major Support Level is a much stronger signal than one that appears in the middle of nowhere.

há 7 horas

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