NPM Rsi Divergence

NPM RSI Divergence Indicator

The NPM RSI Divergence Indicator is a closed-source tool designed to help traders identify potential reversals and high-probability trade setups using divergence between price action and the Relative Strength Index (RSI). It highlights areas where momentum is weakening or strengthening, giving traders early signals of potential trend changes.

What it does

Detects divergences between RSI and price movement, indicating potential trend reversals or continuation.

Shows the strength or reliability of each divergence signal to help traders gauge probability.

Plots visual markers directly on the chart for easier recognition of potential setups.

Helps traders spot early exhaustion points in trends before price reverses or continues strongly.


How it works (concept-level)

Compares price highs/lows with RSI highs/lows to detect hidden or regular divergences.

Applies adaptive filtering to reduce false signals in choppy or low-volatility markets.

Aggregates divergence signals into clear visual markers and strength indicators.

Incorporates momentum context to highlight divergences that are more likely to produce actionable moves.


How to use it

1. Apply the indicator to your chosen symbol and timeframe.


2. Observe divergence markers and their strength indicators on the chart.


3. Confirm potential trade opportunities by considering trend direction and market context.


4. Use divergence signals to assist with trade entry, exit, or risk management decisions.



Alerts

Optionally set alerts when divergence signals appear or when the strength indicator exceeds a user-defined threshold.


Notes

Suitable for multiple markets, including forex, indices, crypto, and equities.

Can be used on intraday or swing trading timeframes depending on your trading strategy.


⚠️ Disclaimer: This script is for educational purposes only and is not financial advice. Trading involves risk, and you can lose money. Always test strategies on a demo account and practice proper risk management.