Lane's Stochastic Divergence Indicator for ThinkorSwim

[gibbsa08]

Has anyone else had trouble with the audible alerts giving false positives? I've checked and verified that this is happening across multiple time frames. Haven't adjusted any of the code outside of deleting the line in the code to alert for bearish divergence.

 

[MerryDay]

@gibbsa08 In TOS, an indicator/alert/scan can be triggered, disappear, signal and then not actually be there during the formation of a candle because the conditions are only temporarily met. You would need to wait until the close of the candle to determine if the conditions hold true.

 

[gibbsa08]

@MerryDay that makes sense, thank you. As far as setting up the scanner goes, I've set up the conditions to be:

close is less than LaneDivergence()."oversold"

Is there a better way to scan for stocks that have recently seen a divergence?

 

[MerryDay]

@gibbsa08 "close is less than LaneDivergence()."oversold"" looks for a reversal not for the divergence.
The divergence calculation is done and plotted with the field name: posDIV which is plotted w/ an arrow on the chart.
To scan, it would be posDiv is true

 

[fungus12]

Anyone know if the arrows repaint after the candle closes?

 

[MerryDay]

@fungus12 I have not used this study personally but a review of the code would suggest that the recursive statement for lowest low and highest highs will continually repaint.

 

[fungus12]

@fungus12 I have not used this study personally but a review of the code would suggest that the recursive statement for lowest low will continually repaint and then vice-versa with the high.

Yea I did some onDemand testing and it looks like the arrows do repaint even after the candle closes. Bummer.

 

[vmalhotra13]

Here is one of the momentum oscillators for ThinkorSwim called Lane Divergence. It shows bullish and bearish signals on the lower study of your chart. The overbought area is set to 80 while the oversold area is set to 20, similar to RSI parameters.

The indicator also comes with an alert system.

thinkScript Code

declare lower;

input over_bought = 80.0;
input over_sold = 20.0;
input percentDLength = 3;
input percentKLength = 14;
input AudibleAlert = yes;

def min_low = Lowest(low, percentKLength);
def max_high = Highest(high, percentKLength);
def rel_diff = close - (max_high + min_low) / 2;
def diff = max_high - min_low;
def avgrel = Average(Average(rel_diff, percentDLength), percentDLength);
def avgdiff = Average(Average(diff, percentDLength), percentDLength);
def SMIData = (avgrel / (avgdiff / 2) + 1) * 50;

def isLow = If (SMIData < SMIData[-1] and SMIData < SMIData[1], 1, 0);
def isHigh =   If (SMIData > SMIData[-1] and SMIData > SMIData[1], 1, 0);

rec prevLowSMI = CompoundValue(1, If(isLow[1], SMIData[1], prevLowSMI[1]),

0);
rec prevHighSMI = CompoundValue(1, If(isHigh[1], SMIData[1], prevHighSMI

[1]), 0);

rec prevLow =  CompoundValue(1, If(isLow[1], low, prevLow[1]), low);
rec prevHigh =  CompoundValue(1, If(isHigh[1], high, prevHigh[1]), high);

def positiveDivergenceReg = If (SMIData > prevLowSMI and low < prevLow, 1,

0);
def positiveDivergenceHid = If (SMIData < prevLowSMI and low > prevLow, 1,

0);

plot posDiv = If(isLow and (positiveDivergenceReg or

positiveDivergenceHid), SMIData, Double.NaN);
posDiv.AssignValueColor(if positiveDivergenceReg then Color.GREEN else

Color.white);
posDiv.SetPaintingStrategy(PaintingStrategy.ARROW_UP);
posDiv.SetLineWeight(2);

def negativeDivergenceReg =  If (SMIData < prevHighSMI and high > prevHigh,

1, 0);
def negativeDivergenceHid = If (SMIData > prevHighSMI and high < prevHigh,

1, 0);

plot negDiv = If(isHigh and ( negativeDivergenceReg or

negativeDivergenceHid), SMIData, Double.NaN);
negDiv.SetPaintingStrategy(PaintingStrategy.ARROW_DOWN);
negDiv.AssignValueColor(if negativeDivergenceReg then Color.RED else

Color.white);
negDiv.SetLineWeight(2);

plot AvgSMI = Average(SMIData, percentDLength);
AvgSMI.SetDefaultColor(Color.GRAY);

plot overbought = over_bought;
overbought.SetDefaultColor(Color.WHITE);
overbought.SetStyle(Curve.SHORT_DASH);

plot oversold = over_sold;
oversold.SetDefaultColor(Color.WHITE);
oversold.SetStyle(Curve.SHORT_DASH);

plot SMI = SMIData;
SMI.AssignValueColor(if SMI > SMI[1] then Color.GREEN else Color.RED);
SMI.SetLineWeight(2);

# Sound alerts
Alert(AudibleAlert and positiveDivergenceReg, "Time TO Buy", Alert.BAR,
Sound.Ring);
Alert(AudibleAlert and negativeDivergenceReg, "Time TO Sell", Alert.BAR,
Sound.Ring);

Shareable Link

https://tos.mx/Wcmk2L

Hi Ben, I am very new to ToS and trading. I was looking for your indicator. If i understood, this gives a signal of Short when red arrow arrives and Call on White arrow. Could you please let me know if this is how it works? is there any other things i shall notice while looking at it... Any suggestion on what time frame it works best?

Thanks in advance.

 

[MerryDay]

Hi Ben, I am very new to ToS and trading. I was looking for your indicator. If i understood, this gives a signal of Short when red arrow arrives and Call on White arrow. Could you please let me know if this is how it works? is there any other things i shall notice while looking at it... Any suggestion on what time frame it works best?

Thanks in advance.

I am not sure what your question is? How what works? How do oscillators work?
https://www.investopedia.com/terms/o/oscillator.asp#:~:text=Oscillators are momentum indicators used,or oversold signals to traders.

Why would you choose the Lane?

1. There are several posts from members stating that it might repaint
2. It is a divergence indicator. Which is an advance concept, you need to be able to eyeball the divergence patterns.

Most oscillators are trend / momentum indicators.
The most traditional one is the RSI which is a built-in ToS oscillator (the forum has scripts that create labels, scans, and watchlists for it)
There is the TMO Oscillator. It is a forum favorite.

 

[Stockbug]

@Ronin13 In this version the arrow colors are now global colors. The colors can be modified under settings. HTH

# Lane's Stochastic Divergence Indicator for ThinkorSwim
# BenTen 3/19/19

declare lower;

input over_bought = 80.0;
input over_sold = 20.0;
input percentDLength = 3;
input percentKLength = 14;
input AudibleAlert = yes;

def min_low = Lowest(low, percentKLength);
def max_high = Highest(high, percentKLength);
def rel_diff = close - (max_high + min_low) / 2;
def diff = max_high - min_low;
def avgrel = Average(Average(rel_diff, percentDLength), percentDLength);
def avgdiff = Average(Average(diff, percentDLength), percentDLength);
def SMIData = (avgrel / (avgdiff / 2) + 1) * 50;

def isLow = If (SMIData < SMIData[-1] and SMIData < SMIData[1], 1, 0);
def isHigh =   If (SMIData > SMIData[-1] and SMIData > SMIData[1], 1, 0);

rec prevLowSMI = CompoundValue(1, If(isLow[1], SMIData[1], prevLowSMI[1]), 0);
rec prevHighSMI = CompoundValue(1, If(isHigh[1], SMIData[1], prevHighSMI[1]), 0);

rec prevLow =  CompoundValue(1, If(isLow[1], low, prevLow[1]), low);
rec prevHigh =  CompoundValue(1, If(isHigh[1], high, prevHigh[1]), high);

def positiveDivergenceReg = If (SMIData > prevLowSMI and low < prevLow, 1,0);
def positiveDivergenceHid = If (SMIData < prevLowSMI and low > prevLow, 1,0);

DefineGlobalColor("ArrowUp", CreateColor(0, 200, 255)) ;
DefineGlobalColor("ArrowDn",  CreateColor(225, 0, 0)) ;
DefineGlobalColor("neutral",  color.gray) ;

plot posDiv = If(isLow and (positiveDivergenceReg or positiveDivergenceHid), SMIData, Double.NaN);
posDiv.AssignValueColor(if positiveDivergenceReg then GlobalColor("ArrowUp") else
GlobalColor("neutral"));
posDiv.SetPaintingStrategy(PaintingStrategy.ARROW_UP);
posDiv.SetLineWeight(2);

def negativeDivergenceReg =  If (SMIData < prevHighSMI and high > prevHigh,1, 0);
def negativeDivergenceHid = If (SMIData > prevHighSMI and high < prevHigh,1, 0);

plot negDiv = If(isHigh and ( negativeDivergenceReg or negativeDivergenceHid), SMIData, Double.NaN);
negDiv.SetPaintingStrategy(PaintingStrategy.ARROW_DOWN);
negDiv.AssignValueColor(if negativeDivergenceReg then GlobalColor("ArrowDn") else
GlobalColor("neutral"));
negDiv.SetLineWeight(2);

plot AvgSMI = Average(SMIData, percentDLength);
AvgSMI.SetDefaultColor(Color.GRAY);

plot overbought = over_bought;
overbought.SetDefaultColor(Color.WHITE);
overbought.SetStyle(Curve.SHORT_DASH);

plot oversold = over_sold;
oversold.SetDefaultColor(Color.WHITE);
oversold.SetStyle(Curve.SHORT_DASH);

plot SMI = SMIData;
SMI.AssignValueColor(if SMI > SMI[1] then Color.GREEN else Color.RED);
SMI.SetLineWeight(2);

Share Link: http://tos.mx/NRHDTWE

In post #20 of this thread there is a chart where it looks like the Stochastics study is coloring the price bars to match the stochastics colors, but the study with share link, NRHDTWE, on this page, does not color the price bars. What am I missing? - Thanks.

 

[MerryDay]

In post #20 of this thread there is a chart where it looks like the Stochastics study is coloring the price bars to match the stochastics colors, but the study with share link, NRHDTWE, on this page, does not color the price bars. What am I missing? - Thanks.

It does appear so. But no. Just a coincidence.