Price Volume Divergence Indicator for ThinkorSwim

[BenTen]

This indicator shows divergences between price and volume.

• Bullish Volume Divergence: When the price is falling while volume continues to rises.
• Bearish Volume Divergence: A bearish divergence signal occurs when the price is increasing while volume is decreasing.

There are two different types of signals

• bear3 and bull3 = divergence signals within the last 3 candlesticks or bars
• bull4 and bear4 = divergences within the last 4 candlesticks or bars

I also included alerts for these reversal signals so you can get alerted for when a new divergence is formed.

thinkScript Code

# Price Volume Divergence Indicator for ThinkorSwim
# Based on the framework of Trend Exhaustion Indicator
# Assembled by BenTen at useThinkScript.com

# 3 Bars Bearish Divergence
def bearish4 = (CLOSE > CLOSE[1] AND CLOSE [1] > CLOSE [2] AND CLOSE [2] > CLOSE [3] AND VOLUMEAVG(LENGTH = 20) < VOLUMEAVG(LENGTH = 20)[1] AND VOLUMEAVG(LENGTH = 20)[1] < VOLUMEAVG(LENGTH = 20)[2] AND VOLUMEAVG(LENGTH = 20)[2] < VOLUMEAVG(LENGTH = 20)[3]);
plot bear3 = bearish4;
bear3.AssignValueColor(Color.MAGENTA);
bear3.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);

# 3 Bars Bullish Divergence
def bullish4 = (CLOSE < CLOSE[1] AND CLOSE [1] < CLOSE [2] AND CLOSE [2] < CLOSE [3] AND VOLUMEAVG(LENGTH = 20) > VOLUMEAVG(LENGTH = 20)[1] AND VOLUMEAVG(LENGTH = 20)[1] > VOLUMEAVG(LENGTH = 20)[2] AND VOLUMEAVG(LENGTH = 20)[2] > VOLUMEAVG(LENGTH = 20)[3]);
plot bull3 = bullish4;
bull3.AssignValueColor(Color.MAGENTA);
bull3.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);

# 4 Bars Bearish Divergence
def bearish5 = (CLOSE > CLOSE[1] AND CLOSE [1] > CLOSE [2] AND CLOSE [2] > CLOSE [3] AND CLOSE [3] > CLOSE [4] AND VOLUMEAVG(LENGTH = 20) < VOLUMEAVG(LENGTH = 20)[1] AND VOLUMEAVG(LENGTH = 20)[1] < VOLUMEAVG(LENGTH = 20)[2] AND VOLUMEAVG(LENGTH = 20)[2] < VOLUMEAVG(LENGTH = 20)[3] and VOLUMEAVG(LENGTH = 20)[3] < VOLUMEAVG(LENGTH = 20)[4]);
plot bear4 = bearish5;
bear4.AssignValueColor(Color.CYAN);
bear4.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);

# 4 Bars Bullish Divergence
def bullish5 = (CLOSE < CLOSE[1] AND CLOSE [1] < CLOSE [2] AND CLOSE [2] < CLOSE [3] AND CLOSE [3] < CLOSE [4] AND VOLUMEAVG(LENGTH = 20) > VOLUMEAVG(LENGTH = 20)[1] AND VOLUMEAVG(LENGTH = 20)[1] > VOLUMEAVG(LENGTH = 20)[2] AND VOLUMEAVG(LENGTH = 20)[2] > VOLUMEAVG(LENGTH = 20)[3] and VOLUMEAVG(LENGTH = 20)[3] > VOLUMEAVG(LENGTH = 20)[4]);
plot bull4 = bullish5;
bull4.AssignValueColor(Color.CYAN);
bull4.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);

# Alerts
Alert(bull3, " ", Alert.Bar, Sound.Chimes);
Alert(bear3, " ", Alert.Bar, Sound.Chimes);
Alert(bull4, " ", Alert.Bar, Sound.Bell);
Alert(bear4, " ", Alert.Bar, Sound.Bell);

Shareable Link

https://tos.mx/uP5aTz

 

[BenTen]

I found this indicator, though. Give it a try.

# Price Volume Divergence
# Mobius
# Chat Room Request 09.10.2014

declare lower;

def price = close;
def vol = volume;

script Scale {
    input c = close;
    input Min = .01;
    input Max =   1;
    def hh = HighestAll(c);
    def ll   = LowestAll(c);
    plot Range = (((Max - Min) * (c - ll)) /  (hh - ll)) + Min;
}

plot NormPrice = Scale(c = price).Range;
NormPrice.SetDefaultColor(Color.Green);
plot NormVolume = Scale(c = vol).Range;
NormVolume.SetDefaultColor(Color.Red);
plot mean = if isNaN(close) then Double.NaN else .5;
mean.SetDefaultColor(Color.White);

def cond1 = normprice < mean;
def cond2 = normprice > mean;

def cond3 = normvolume < mean;
def cond4 = normvolume > mean;

addlabel(cond1, "Negative Price Convergence", color.red);
addlabel(cond2, "Positive Price Convergence", color.green);

addlabel(cond3, "Negative Volume Convergence", color.red);
addlabel(cond4, "Positive Volume Convergence", color.green);

addlabel(normprice > 0.9, "Price overbought", color.red);
addlabel(normprice < 0.1, "Price oversold", color.green);

 

[Dupre]

There have been a couple times where I get an audible alert that divergence has occurred but no arrow. Has anyone else run into this issue?

 

[BenTen]

@Dupre That is because the candle is still developing and there was no divergence after it closed.

 

[Kapitalk12]

Does this repaint?

 

[BenTen]

@Kapitalk12 No, but make sure you wait for the candle to close for confirmation.

 

[charlie2598]

@tomsk
also when volume increasing stock can go any side up to down
can we define condition if vol increase and price increase then Green color and
Volume increasing and price going down red color
and we can scan this thing any idea how we do that.

 

[MerryDay]

@tomsk
also when volume increasing stock can go any side up to down
can we define condition if vol increase and price increase then Green color and
Volume increasing and price going down red color
and we can scan this thing any idea how we do that.

See the first post

 

[serendipity2020]

I found this indicator, though. Give it a try.

# Price Volume Divergence
# Mobius
# Chat Room Request 09.10.2014

declare lower;

def price = close;
def vol = volume;

script Scale {
    input c = close;
    input Min = .01;
    input Max =   1;
    def hh = HighestAll(c);
    def ll   = LowestAll(c);
    plot Range = (((Max - Min) * (c - ll)) /  (hh - ll)) + Min;
}

plot NormPrice = Scale(c = price).Range;
NormPrice.SetDefaultColor(Color.Green);
plot NormVolume = Scale(c = vol).Range;
NormVolume.SetDefaultColor(Color.Red);
plot mean = if isNaN(close) then Double.NaN else .5;
mean.SetDefaultColor(Color.White);

def cond1 = normprice < mean;
def cond2 = normprice > mean;

def cond3 = normvolume < mean;
def cond4 = normvolume > mean;

addlabel(cond1, "Negative Price Convergence", color.red);
addlabel(cond2, "Positive Price Convergence", color.green);

addlabel(cond3, "Negative Volume Convergence", color.red);
addlabel(cond4, "Positive Volume Convergence", color.green);

addlabel(normprice > 0.9, "Price overbought", color.red);
addlabel(normprice < 0.1, "Price oversold", color.green);

Whats the difference between this and the one from post #1?

 

[tightlinekc]

The second indicator is pretty nice.

Green Line (Normalized Price - NormPrice):​

1. Above 0.5: Indicates "Positive Price Convergence," suggesting upward momentum in price.
2. Below 0.5: Indicates "Negative Price Convergence," suggesting downward momentum in price.
3. Above 0.9: Labeled as "Price overbought," suggesting that the asset may be overvalued and could be due for a correction.
4. Below 0.1: Labeled as "Price oversold," suggesting that the asset may be undervalued and could be due for a rebound.

Red Line (Normalized Volume - NormVolume):​

1. Above 0.5: Indicates "Positive Volume Convergence," suggesting that the volume is supporting the current price trend.
2. Below 0.5: Indicates "Negative Volume Convergence," suggesting that the volume is not supporting the current price trend.

Combined Interpretation:​

• Both Lines Above 0.5: Both price and volume are showing positive convergence, which could indicate a strong upward trend.
• Both Lines Below 0.5: Both price and volume are showing negative convergence, which could indicate a strong downward trend.
• Green Above 0.5, Red Below 0.5: Price is moving up, but volume is not supporting it, which could indicate a potential reversal.
• Green Below 0.5, Red Above 0.5: Price is moving down, but volume is not supporting it, which could also indicate a potential reversal.

 

[tightlinekc]

I modified the code to add visual aids:
# Price Volume Divergence
# Mobius
# Chat Room Request 09.10.2014

declare lower;

def price = close;
def vol = volume;

script Scale {
input c = close;
input Min = .01;
input Max = 1;
def hh = HighestAll(c);
def ll = LowestAll(c);
plot Range = (((Max - Min) * (c - ll)) / (hh - ll)) + Min;
}

plot NormPrice = Scale(c = price).Range;
NormPrice.SetDefaultColor(Color.Green);
plot NormVolume = Scale(c = vol).Range;
NormVolume.SetDefaultColor(Color.Red);
plot mean = if isNaN(close) then Double.NaN else .5;
mean.SetDefaultColor(Color.White);

# Draw Horizontal Lines
plot line_01 = 0.1;
line_01.SetDefaultColor(Color.GREEN);
line_01.HideTitle();
line_01.HideBubble();
line_01.SetLineWeight(1);

plot line_05 = 0.5;
line_05.SetDefaultColor(Color.WHITE);
line_05.HideTitle();
line_05.HideBubble();
line_05.SetLineWeight(1);

plot line_09 = 0.9;
line_09.SetDefaultColor(Color.RED);
line_09.HideTitle();
line_09.HideBubble();
line_09.SetLineWeight(1);

def cond1 = normprice < mean;
def cond2 = normprice > mean;

def cond3 = normvolume < mean;
def cond4 = normvolume > mean;

addlabel(cond1, "Negative Price Convergence", color.red);
addlabel(cond2, "Positive Price Convergence", color.green);

addlabel(cond3, "Negative Volume Convergence", color.red);
addlabel(cond4, "Positive Volume Convergence", color.green);

addlabel(normprice > 0.9, "Price overbought", color.red);
addlabel(normprice < 0.1, "Price oversold", color.green);

 

[RobnATL]

I modified the code to add visual aids:
# Price Volume Divergence
# Mobius
# Chat Room Request 09.10.2014

declare lower;

def price = close;
def vol = volume;

script Scale {
input c = close;
input Min = .01;
input Max = 1;
def hh = HighestAll(c);
def ll = LowestAll(c);
plot Range = (((Max - Min) * (c - ll)) / (hh - ll)) + Min;
}

plot NormPrice = Scale(c = price).Range;
NormPrice.SetDefaultColor(Color.Green);
plot NormVolume = Scale(c = vol).Range;
NormVolume.SetDefaultColor(Color.Red);
plot mean = if isNaN(close) then Double.NaN else .5;
mean.SetDefaultColor(Color.White);

# Draw Horizontal Lines
plot line_01 = 0.1;
line_01.SetDefaultColor(Color.GREEN);
line_01.HideTitle();
line_01.HideBubble();
line_01.SetLineWeight(1);

plot line_05 = 0.5;
line_05.SetDefaultColor(Color.WHITE);
line_05.HideTitle();
line_05.HideBubble();
line_05.SetLineWeight(1);

plot line_09 = 0.9;
line_09.SetDefaultColor(Color.RED);
line_09.HideTitle();
line_09.HideBubble();
line_09.SetLineWeight(1);

def cond1 = normprice < mean;
def cond2 = normprice > mean;

def cond3 = normvolume < mean;
def cond4 = normvolume > mean;

addlabel(cond1, "Negative Price Convergence", color.red);
addlabel(cond2, "Positive Price Convergence", color.green);

addlabel(cond3, "Negative Volume Convergence", color.red);
addlabel(cond4, "Positive Volume Convergence", color.green);

addlabel(normprice > 0.9, "Price overbought", color.red);
addlabel(normprice < 0.1, "Price oversold", color.green);

When I use this indicator, the plots change as I change the time length. For example, when looking at a stock (RTX) on a daily 1-month chart, the lines are in one position. When I change the chart to a daily 6-month view, the lines (and values of the lines) change. Is this due to the use of the HighestAll( ) function in the normalization script?

 

[MerryDay]

When I use this indicator, the plots change as I change the time length. For example, when looking at a stock (RTX) on a daily 1-month chart, the lines are in one position. When I change the chart to a daily 6-month view, the lines (and values of the lines) change. Is this due to the use of the HighestAll( ) function in the normalization script?

Yes, you are correct. HighestAll() function makes its calculations on the total number of charts available on the chart.
https://tlc.thinkorswim.com/center/reference/thinkScript/Functions/Tech-Analysis/HighestAll

Additionally, Schwab has decided to no longer update HighestAll in real time.
read more:
https://usethinkscript.com/threads/...in-real-time-in-thinkorswim.8794/#post-116082