Stoch_RSI_Chart

Enhanced Stochastic RSI Divergence Indicator with VWAP Filter for Charts

This custom indicator builds upon the classic Stochastic RSI to automatically detect both regular and hidden divergences. It’s designed to help traders spot potential market reversals or continuations using two methods for divergence detection (fractal‑ and pivot‑based) while offering optional VWAP filtering for confirmation.

Key Features
Stoch RSI Calculation
The indicator computes a smoothed Stoch RSI using configurable parameters for RSI length, stochastic length, and smoothing periods. An option to average the K and D lines provides a cleaner momentum view.

Divergence Detection via Fractals & Pivots

Fractal-Based Divergences:
Looks for 4-candle patterns to identify higher-highs or lower-lows in the price that are not confirmed by the oscillator, signaling potential reversals.

Pivot-Based Divergences:
Utilizes TradingView’s built-in pivot functions to find divergence conditions over adjustable pivot ranges.

Regular vs. Hidden Divergences:

Regular Divergence: Occurs when price makes a new extreme (higher high or lower low) while the Stoch RSI fails to follow suit.

Hidden Divergence: Indicates potential trend continuations when the oscillator diverges against the established price trend.

Optional VWAP Filtering
The script includes two optional VWAP filters that work as follows:

VWAP Filter on Regular Divergences:
Only confirms regular divergence signals if the current price satisfies the VWAP condition (e.g., price is above VWAP for bullish signals, below VWAP for bearish signals).

VWAP Filter on Hidden Divergences:
Similarly, hidden divergence signals are validated only when the price meets specific VWAP conditions, adding an extra layer of trend confirmation.

Customizable Alerts and Visual Labels
Easily configure divergence labels (“B” for bullish, “S” for bearish) and enable up to four alert conditions for real‑time notifications when a divergence occurs.

Credits & History:
Log RSI by fskrypt
Divergence Detection originally by RicardoSantos (with edits from JustUncleL)
Further Edits by NeoButane on August 8, 2018
Latest Edits by fymd on June 1, 2024