Chebyshev-Gauss Convergence Divergence

The Chebyshev-Gauss Convergence Divergence is a momentum indicator that leverages the Chebyshev-Gauss Moving Average (CG-MA) to provide a smoother and more responsive alternative to traditional oscillators like the MACD. For more information see the moving average script:

How it works:

1. It calculates a fast CG-MA and a slow CG-MA. The CG-MA uses Gauss-Chebyshev quadrature to compute a weighted average, which can offer a better trade-off between lag and smoothness compared to simple or exponential MAs.
   
2. The Oscillator line is the difference between the fast CG-MA and the slow CG-MA.
   
3. A Signal Line, which is a simple moving average of the Oscillator line, is plotted to show the average trend of the oscillator.
   
4. A Histogram is plotted, representing the difference between the Oscillator and the Signal Line. The color of the histogram bars changes to indicate whether momentum is strengthening or weakening.
   

How to use:

• Crossovers: A buy signal can be generated when the Oscillator line crosses above the Signal line. A sell signal can be generated when it crosses below.
  
• Zero Line: When the Oscillator crosses above the zero line, it indicates upward momentum (fast MA is above slow MA).When it crosses below zero, it indicates downward momentum.
  
• Divergence: Like with the MACD, look for divergences between the oscillator and price action to spot potential reversals.
  
• Histogram: The histogram provides a visual representation of the momentum. When the bars are growing, momentum is increasing. When they are shrinking, momentum is fading.