Bill William Bull/Bear divergent bars See: Book, Trading Chaos by Bill Williams Coded by polyclick
A bullish (green) divergent bar, signals a trend switch from bear -> bull -> The current bar has a lower low than the previous bar, but closes in the upper half of the candle. -> This means the bulls are pushing from below and are trying to take over, potentially resulting in a trend switch to bullish. -> We also check if this bar is below the three alligator lines to avoid false positives.
A bearish (red) divergent bar, signals a trend switch from bull -> bear -> The current bar has a higher high than the previous bar, but closes in the lower half of the candle. -> This means the bears are pushing the price down and are taking over, potentially resulting in a trend switch to bearish. -> We also check if this bar is above the three alligator lines to avoid false positives.
Best used in combination with the Bill Williams Alligator indicator.
Some stuff I noticed while using this indicator which are -IMPORTANT- to know.
Works best on higher timeframes (1H, 4H, 1D, ...).
It's important you look for, what Bill Williams calls, "angularation" before using the signal.
Angularation, for full explaination, check his book: "Trading Chaos".
Quick giveaway: draw an average line through the last few prices, draw an average line through the green/red line of the alligator.
When a divergent bar pops up when the angle between those 2 lines is very big, then the trend is about to switch.
So, what we want is: a divergent bar popping up from a big distance to the alligator. A correction, aka: trend switch will occur to go back to the alligator.
Then, for an extra confirmation, use the awesome oscillator.
For more insights, read his book, it's hard to explain it all in this description :D
patricktapper
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@polyclick, Thanks. Well done. I use this with alerts. I trained under Bill and Justine 12 years ago. All this still works. Ignore all material that is not in "Trading Chaos - Second Edition". A lot has changed since Bill released his first book many years ago. Anyone seriously wanting to learn all this should at least buy the book. Otherwise you're treating this like a amateur hobby, and pretty much doomed.
QA_mob
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This is exactly what I have been looking for, thanks. Do you have advise on how to setup Alerts for this indicator?
CJMann
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Great work! You only use the divergent bars to enter or add in the direction of trend, right?? Also, if you don't mind, what is the full name of that Fractal indicator you are using?
patricktapper
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@CJMann, Only to enter initially long or short. It is not an add on signal.
loys19
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thank you so much for this
nkhetia
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Thank you for sharing this code!
bossx
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is there a way to make this in to a mtf indecater ?
polyclick
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@bossx, I have noooooo idea :D it's my first indicator so I'll have to look into this. Don't really know wether this is going to be beneficial tho.
robinstephane
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Hi Nice code. I can't transpose it to prorealtime. Can you give a hand ?
Works best on higher timeframes (1H, 4H, 1D, ...).
It's important you look for, what Bill Williams calls, "angularation" before using the signal.
Angularation, for full explaination, check his book: "Trading Chaos".
Quick giveaway: draw an average line through the last few prices, draw an average line through the green/red line of the alligator.
When a divergent bar pops up when the angle between those 2 lines is very big, then the trend is about to switch.
So, what we want is: a divergent bar popping up from a big distance to the alligator. A correction, aka: trend switch will occur to go back to the alligator.
Then, for an extra confirmation, use the awesome oscillator.
For more insights, read his book, it's hard to explain it all in this description :D