Explanation:
Detection of Peaks and Valleys: Initially, the RSI (Relative Strength Index) is calculated based on a selected price source. Then, any change in RSI that exceeds the specified percentage threshold is considered a peak or a valley point. These points are visually represented on the chart with green and red triangles.
Identification of Divergences: Differences between peak and valley points are examined. A negative divergence occurs when peak values increase on the price chart while decreasing on the indicator chart. Conversely, a positive divergence occurs when valley values decrease on the price chart while increasing on the indicator chart.
Generation of Buy and Sell Signals: When a negative divergence is detected, a sell position is opened and held until the specified take profit level is reached. Similarly, when a positive divergence is detected, a buy position is opened and held until the specified take profit level is reached.
This strategy utilizes the RSI indicator to assess the momentum and strength of price movements and generates buy and sell signals based on the detection of divergences. Parameters such as take profit levels and others can be adjusted by the user.
03:17:46 'Divergence Strategy 1' saved.
03:17:46 Compiling...
03:17:47 Compiled.
03:17:47 Added to chart.
Detection of Peaks and Valleys: Initially, the RSI (Relative Strength Index) is calculated based on a selected price source. Then, any change in RSI that exceeds the specified percentage threshold is considered a peak or a valley point. These points are visually represented on the chart with green and red triangles.
Identification of Divergences: Differences between peak and valley points are examined. A negative divergence occurs when peak values increase on the price chart while decreasing on the indicator chart. Conversely, a positive divergence occurs when valley values decrease on the price chart while increasing on the indicator chart.
Generation of Buy and Sell Signals: When a negative divergence is detected, a sell position is opened and held until the specified take profit level is reached. Similarly, when a positive divergence is detected, a buy position is opened and held until the specified take profit level is reached.
This strategy utilizes the RSI indicator to assess the momentum and strength of price movements and generates buy and sell signals based on the detection of divergences. Parameters such as take profit levels and others can be adjusted by the user.
03:17:46 'Divergence Strategy 1' saved.
03:17:46 Compiling...
03:17:47 Compiled.
03:17:47 Added to chart.