- Underlying and implied volatiliy normally show negative correlated behavior (price rises, vola falls and vice versa)
- This study shows symbols in on candles in chart where Undelying and corresponding vola index show same bahvior for 1,2 or 3 consecutive bars. (price rises and vola rises and vice versa)
- This situation is called Vola Divergence. Red, when prices and vola fall; green, when price and vola rise
- This information can be used to detect possible end of Up/Down-Swings.
- User can configure if rising or falling or both price movements shall be displayed.
- This study can be used with root symbols, which provide corresponding indices.
- supported Root Symbols: SPX , NDQ , DJI, RUT, CL , XLE , GC , SI, EUR, HSI , FXI , EWZ , AMZN , AAPL , GS , GOOG , IBM , DEU40
- in all other symbols, no symbols are displayed.
- underlying displayed in chart
- each Divergence can be switched off/on separately
- output of each displayed symbol can be configured
- RedDiv1: first bar with rising price and rising index
- GreenDiv1: first bar with falling price and falling index
- RedDiv2: second bar in a row with rising price and rising index
- GreenDiv2: second bar with falling price and falling index
- RedDiv3: third bar in a row with rising price and rising index
- GreenDiv3: third bar in a row with falling price and falling index
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.