SMT Divergences [OutOfOptions]

19 thg 10, 2024

Smart Money Technique (SMT) Divergence is designed to identify discrepancies between correlated assets within the same timeframe. It occurs when two related assets exhibit opposing signals, such as one forming a higher low while the other forms a lower low. This technique is particularly useful for anticipating market shifts or reversals before they become evident through other Premium Discount (PD) Arrays.

This indicator works by identifying the highs and lows that have formed for an asset on the current chart and the correlated symbol defined in the settings. Once a pivot on either asset is formed, it checks if the pivot has taken liquidity as identified by the previous pivot in the same direction (i.e., a new high taking out a previous high). If this is the case and the corresponding asset has not taken a similar pivot, the condition is determined to be a potential valid divergence. The indicator will then filter out SMTs formed by adjacent candles, requiring at least one candle difference between the candles forming the SMT.

If the “Candle Direction Validation” setting is enabled, the indicator will further check both assets to ensure that for bullish SMTs, the last high on both assets was formed by down candle, and for bearish SMTs, the low was formed by an up candle. This check can often eliminate low-probability SMTs that are frequently broken.

The referenced chart shows divergence between Nasdaq (NQ) and S&P 500 (ES) futures, which are normally closely correlated assets that move in the same direction. The lines shown represent bullish and bearish divergences between the two when they are formed. As you can see from the chart, SMT Divergences may not always indicate a reversal, or a reversal might be just a short-term retrace. Therefore, SMT Divergences should not be used independently. However, in conjunction with other PD arrays, they can provide strong confirmation of a change in market direction.

Configurability:

• Pivot strength - Indicates how many bars to the left/right of a high for pivot to be considered, recommended to keep at 1 for maximum detection speed
  
• Candle Direction Validation - Additional SMT validation to filter out weak/low-probability SMTs be examining candle direction
  
• Line Styling for Bullish/Bearish SMTs - Ability to customize line style, color & width for bullish/bearish SMTs
  
• Label Control - Whether or not to show SMT label and if shown what font size & color should be used
  

What makes this indicator different:
Unlike other SMT indicators, this indicators has additional built-in controls to remove low-probability SMTs

26 thg 10, 2024

Phát hành các Ghi chú

Added a new option (off by default) to remove broken SMTs
Fixed a small bug with bearish SMT detection in some cases
Fixed positioning of labels on very large SMTs

26 thg 10, 2024

Phát hành các Ghi chú

Make the remove broken SMT option show in status bar

27 thg 2

Phát hành các Ghi chú

Added Support for alerts on SMT formation and breakage, you can configure which ones you want to be triggered inside the indicator settings

27 thg 2

Phát hành các Ghi chú

Fixed a bug with edge values for SMT alerts

16 thg 6

Phát hành các Ghi chú

Only mark SMT on candle close, real-time causes too many false SMTs that are broken on the following candle especially when alerts are enabled.

17 thg 6

Phát hành các Ghi chú

Fixed an error that can prevent script from working when switching to new contract

19 thg 7

Phát hành các Ghi chú

• Added an option (off by default) that can allow for real-time detection of SMT formation, however this can lead to many false positives (i.e. SMTs that are broken as soon as they are formed)
  
• Improved removal of old SMTs that often remained on the chart
  
• Adjusted SMT drawing to point to nearest high next to the SMT formation candle
  
• Started using library code
  

21 thg 7

Phát hành các Ghi chú

• Added automatic detection of the corresponding ticker when trading NQ/ES, when the Ticker value is left empty (new default) (i.e. Will match NQ1 to ES1 and ESU2025 to NQU2025 automatically)
  
• Improved rendering detection, to align SMT to the highs/lows
  
• Fixed some rare cases when invalid/weak SMTs were detected
  

21 thg 7

Phát hành các Ghi chú

Realtime SMT detection bug fixes

22 thg 7

Phát hành các Ghi chú

Additional real-time fixes