Divergence Buy/Sell

User Manual: Buy/Sell Divergence v1
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The Buy/Sell Divergence v1 indicator is a momentum-based analysis tool built upon the Vortex system. Its primary function is to identify discrepancies between price action and trend strength, signaling potential exhaustion points and market reversals (Divergences).
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1. Interface Components

- The indicator consists of three main visual elements in the bottom panel:

Dynamic Vortex (Lines):

Green Line (VI+): Represents the strength of the buyers.

Red Line (VI-): Represents the strength of the sellers.

Note: With "Dynamic View" enabled, only the dominant line is shown, removing visual noise and clutter.

Delta Histogram:

Represents the mathematical difference between the two forces. Bars above zero (Lime) indicate a bullish trend; bars below zero (Maroon) indicate a bearish trend.

Background Color:

Green: Confirmed bullish trend.

Red: Confirmed bearish trend.
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2. Signal Interpretation


A. BUY DIV (Bullish Divergence)

Occurs during a downtrend and signals a potential bounce or upward reversal.

Price Condition: The price hits a new lower low.

Indicator Condition: The red line (VI-) shows a lower peak of strength compared to its previous peak.

Visual Signal: A green line connects the peaks on the indicator with the label "BUY DIV".

Meaning: Sellers are pushing the price down, but with less conviction. Selling pressure is evaporating.
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B. SELL DIV (Bearish Divergence)

Occurs during an uptrend and signals a potential pullback or downward reversal.

Price Condition: The price hits a new higher high.

Indicator Condition: The green line (VI+) shows a lower peak of strength compared to its previous peak.

Visual Signal: A red line connects the peaks on the indicator with the label "SELL DIV".

Meaning: Buyers are driving the price to new highs, but buying momentum is fading. The trend is becoming "exhausted."
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3. Parameter Configuration

Parameter Description Suggestion

Length The Vortex calculation period (default: 14). Use 7-10 for Scalping; 14-
21 for Day Trading; 28+ for
Swing Trading.
Pivot Lookback Number of candles needed to confirm a peak Increase this (e.g., 8-10)
(default: 5). for rarer but more
reliable divergence signals.

Dynamic View Hides the weaker trend line. Keep this ON for a clean
and focused chart reading.
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4. Strategic Advice & Risk Management

1. Candle Confirmation: Do not enter the trade at the exact moment the label appears. Because divergences are based on "Pivots," the label appears with a delay equal to the Pivot Lookback. Wait for a break of the signal candle's high (for Buy Div) or low (for Sell Div).

2. Trend Filtering: Divergences are most powerful when they occur near historical support or resistance zones on the price chart.

3. Stop Loss Placement:

- For a BUY DIV signal, place the Stop Loss slightly below the recent price low.

- For a SELL DIV signal, place the Stop Loss slightly above the recent price high.

4. Confluence: If you receive a SELL DIV and simultaneously see the histogram shrinking toward the zero line, the probability of a successful trade increases significantly.
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