Awesome Oscillator (AO) Divergence Indicator for ThinkorSwim

BenTen

Administrative
Staff member
Staff
VIP
Lifetime
This indicator paints your candlesticks when a bullish divergence is found on both the RSI and the Awesome Oscillator and red when bearish divergence is found.

GIMkv1T.png

8xWDU0p.png


thinkScript Code

Code:
# Confirmed Divergence
# Assembled by BenTen at useThinkScript.com
# Converted from https://www.tradingview.com/script/PFsMAjcQ-Confirmed-Divergence/

input rsiprd = 14;
input source = close;
input averageType = AverageType.WILDERS;

def NetChgAvg = MovingAverage(averageType, source - source[1], rsiprd);
def TotChgAvg = MovingAverage(averageType, AbsValue(source - source[1]), rsiprd);
def ChgRatio = if TotChgAvg != 0 then NetChgAvg / TotChgAvg else 0;

def RSI = 50 * (ChgRatio + 1);

input length = 30;
input mult = 2.0;
input src = close;

input ob = 70;
input os = 30;
input lengthAO1 = 5;
input lengthAO2 = 34;
def rv = RSI;

def AO = simpleMovingAvg((high + low) / 2, lengthAO1) - simpleMovingAvg((high + low) / 2, lengthAO2);

input x = 5;
input z = 25;

def srcLL = src > lowest(src, x) and lowest(src, x)<lowest(src, z)[x];

def rsiHL = rv > lowest(rv, x) and lowest(rv, x) > lowest(rv, z)[x] and lowest(rv, z)<os;

def aoHL = AO > lowest(AO, x) and lowest(AO, x) > lowest(AO, z)[x] and lowest(AO, x) < 0;

def BullishDiv = srcLL and rsiHL and aoHL;

def srcHH = src < highest(src, x) and highest(src, x)>highest(src, z)[x];

def rsiLH = rv < highest(rv, x) and highest(rv, x) < highest(rv, z)[x] and highest(rv, z)>ob;

def aoLH = AO < highest(AO, x) and highest(AO, x) < highest(AO, z)[x] and highest(AO, x) > 0;

def BearishDiv = srcHH and rsiLH and aoLH;

def basis = simpleMovingAvg(source, length);
def dev = mult * stdev(source, length);

def upper = basis + dev;
def lower = basis - dev;

assignPriceColor(if BullishDiv then color.green else if BearishDiv then color.red else Color.white);
 

iamtom07

New member
2019 Donor
Ben, instead of painting the bars, would you display the arrow of the first bar of divergence?
Thanks,
 

BenTen

Administrative
Staff member
Staff
VIP
Lifetime
@iamtom07 Add the # sign in front of the assignPriceColor code and add the following script at the end of your script:

Code:
# Plot Signals
plot bullish = BullishDiv;
bullish.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);
bullish.SetDefaultColor(Color.CYAN);
bullish.SetLineWeight(1);
plot bearish = BearishDiv;
bearish.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);
bearish.SetDefaultColor(Color.CYAN);
bearish.SetLineWeight(1);
 

scxpertise

New member
I mainly swing trades, is this useful for longer timeframes for Daily. Do you have TOS scanners that scan for stocks in a channel b.c I like to use Iron Condor strategy. Thanks
 

BenTen

Administrative
Staff member
Staff
VIP
Lifetime
@scxpertise You can always backtest it by looking through your chart's timeframe with this indicator. Add this code to the end of your script and you should be able to scan for new signals. (Watch this video if you don't know how to).
 

RickK

Active member
Hey @BenTen .....this is awesome! Very useful as I am a reversion to the mean trader. I'm also interested in making the conditions more lenient. I've reset OB/OS to 60/40 with some success and have also set the AO to 5, 20 instead of 5,34. There is one thing that I have a big question about tho. Here's the setup: I find that there are often strong "divergences" when price has simply met the closing price but has not actually met or exceeded (let's say) the lowest low. See the image below. At 9:10 I see a great "divergence", but price hasn't actually met the conditions. I see in your code for this that there is a lot of reference to "highest" and "lowest", but is there a way to modify the code to include conditions where price has simply met the lowest "close" and not the lowest "low"?

Thanks!

9mcgT4P.jpeg
 

Similar threads

The Market Trading Game Changer

Join 2,500+ subscribers inside the useThinkScript VIP Membership Club
  • Exclusive indicators
  • Proven strategies & setups
  • Private Discord community
  • ‘Buy The Dip’ signal alerts
  • Exclusive members-only content
  • Add-ons and resources
  • 1 full year of unlimited support

Frequently Asked Questions

What is useThinkScript?

useThinkScript is the #1 community of stock market investors using indicators and other tools to power their trading strategies. Traders of all skill levels use our forums to learn about scripting and indicators, help each other, and discover new ways to gain an edge in the markets.

How do I get started?

We get it. Our forum can be intimidating, if not overwhelming. With thousands of topics, tens of thousands of posts, our community has created an incredibly deep knowledge base for stock traders. No one can ever exhaust every resource provided on our site.

If you are new, or just looking for guidance, here are some helpful links to get you started.

What are the benefits of VIP Membership?
VIP members get exclusive access to these proven and tested premium indicators: Buy the Dip, Advanced Market Moves 2.0, Take Profit, and Volatility Trading Range. In addition, VIP members get access to over 50 VIP-only custom indicators, add-ons, and strategies, private VIP-only forums, private Discord channel to discuss trades and strategies in real-time, customer support, trade alerts, and much more. Learn all about VIP membership here.
How can I access the premium indicators?
To access the premium indicators, which are plug and play ready, sign up for VIP membership here.
Top