The length of the is configurable (default length: 14). The lengths of the divergences are configurable (default: minimum length 3 and maximum length 28 - the latter being twice the default length of the ).
This indicator will detect divergences which are still building up. Be duly warned: upcoming divergences may still get invalidated. Another case that one should be very mindful of is that an upcoming divergence may still increase in magnitude before it plays out. Possibly over several more timesteps, there may even be entire additional drives.
The value of this indicator indeed reflects the magnitude of divergence on a chart. However, there is no reason to think the magnitude of a divergence affects the likelihood of said divergence playing out.
The color of the indicator indicates the kind of divergence. The default colors are
- green for ,
- maroon (dark red) for divergence,
- lime/light green for hidden ,
- dark pink for hidden divergence.
Please let me know if you would like to see a version of this indicator that plots both the and this histogram. I will do this for personal use, but I am being a bit of a purist with this publication.
In fact, please don't hesitate to make any comment or to give any kind of suggestion.
I was originally going to leave it to the user of this indicator
- to verify the validity of a possible divergence and
- to determine the type of a possible divergence.
- to check for tops and bottoms, and
- to check whether all values in a series are above or below a line.