Weighted RSI Divergence

Weighted RSI Divergence
A powerful divergence engine that grades every RSI divergence by strength, context, and confluence — helping you filter noise and focus only on the highest-probability reversal setups.

This script combines RSI divergences with five confirmation layers to produce confidence-weighted signals, clearer trade decisions, and alert-ready setups for both bullish and bearish reversals.

What This Indicator Detects

• Bullish Divergence → Price makes a lower low while RSI makes a higher low
  
• Bearish Divergence → Price makes a higher high while RSI makes a lower high
  

Confirmation Factors (Each Adds +1 to the Score)

• Volume Spike: Above-average volume on the divergence bar
  
• Trend Alignment: Divergence occurs in harmony with higher-timeframe trend dynamics
  
• Key Level Proximity: Price tests significant support or resistance
  
• Momentum Extremes: RSI reaches oversold/overbought thresholds
  
• Candle Reversal Pattern: Engulfing, pin bar, or similar reversal structure
  

Confidence Scoring

• 1–2 → Low Confidence (gray)
  
• 3 → Medium Confidence (yellow)
  
• 4–5 → High Confidence (green/red)
  

Higher scores = higher-probability setups.

Visual Components

• RSI plot with dynamic gradient coloring
  
• Divergence lines mapped to RSI pivots
  
• Signal labels showing confidence + factors
  
• Background highlighting for high-confidence events
  
• Real-time confidence meter for active bar conditions
  
• Optional data table for factor-by-factor breakdown
  

Alerts Included

• High-confidence bullish & bearish divergences
  
• Medium-confidence signals
  
• Any divergence meeting your minimum threshold
  

Best Practices

• Prioritize setups with 4 or 5 confirmations
  
• Use higher timeframes (4H, 1D, 1W) for more reliable signals
  
• Combine with market structure and price action (S/R, HTF trend, liquidity zones)
  
• Counter-trend divergences require stronger scores to validate
  

Final Notes
This script focuses on clarity, risk reduction, and selective trade timing. The confidence system helps distinguish weak divergences from high-probability reversal conditions — giving traders a structured, repeatable edge.