RSI Divergence Strategy v6

What this does
Detects regular and hidden divergences between price and RSI using confirmed RSI pivots. Adds RSIpivot entry gates, a normalized strength + volume filter, optional volume gate, delayed entries, and transparent risk management with rigid SL and activatable trailing. Visuals are throttled for clarity and include a gap-free horizontal RSI gradient.

How it works (simple)

🧮 RSI is calculated on your selected source/period.

📌 RSI pivots are confirmed with left/right lookbacks (lbL/lbR). A pivot becomes final only after lbR bars; before that, it can move (expected).

🔎 The latest confirmed pivot is compared against the previous confirmed pivot within your bar window:
• Regular Bullish = price lower low + RSI higher low
• Hidden Bullish = price higher low + RSI lower low
• Regular Bearish = price higher high + RSI lower high
• Hidden Bearish = price lower high + RSI higher high

💪 Each divergence gets a strength score that multiplies price % change, RSI change, and a volume ratio (Volume SMA / Baseline Volume SMA).
• Set Min divergence strength to filter tiny/noisy signals.
• Turn on the volume gate to require volume ratio ≥ your threshold (e.g., 1.0).

🎯 RSIpivot gating:
• Longs only if RSI at the bullish pivot ≤ 30 (default).
• Shorts only if RSI at the bearish pivot ≥ 70 (default).

⏱ Entry timing:
• Immediate: on divergence confirm (delay = 0).
• Delayed: after N bars if RSI is still valid.
• RSI-only mode: ignore divergences; use RSI thresholds only.

🛡 Risk:
• Rigid SL is placed from average entry.
• Trailing activates only after unrealized gain ≥ threshold; it re-anchors on new highs (long) or new lows (short).

What’s NEW here (vs. the reference) — and why you may care
• Improved pivots + bar window → fewer early/misaligned signals; cleaner drawings.
• RSIpivot gates → entries aligned with true oversold/overbought at the exact decision bar.
• Normalized strength + volume gate → ignore weak or low-volume divergences.
• Delayed entries → require the signal to persist N bars if you want more confirmation.
• Rigid SL + activatable trailing → trailing engages only after a cushion, so it’s less noisy.
• Clutter control + gradient → readable chart with a smooth RSI band look.

Suggested starting values (clear ranges)
• RSIpivot thresholds: LONG ≤ 30 (oversold), SHORT ≥ 70 (overbought).
• Min divergence strength:

0.0 = off

3–6 = moderate filter

7–12 = strict filter for noisy LTFs
• Volume gate (ratio):

1.0 = at least baseline volume

1.2–1.5 = strong-volume only (fewer but cleaner signals)
• Pivot lookbacks:

lbL 1–2, lbR 3–4 (raise lbR to confirm later and reduce noise)
• Bar window (between pivots):

Min 5–10, Max 30–60 (increase Min if you see micro-pivots; increase Max for wider structures)
• Risk:

Rigid SL 2–5% on liquid majors; 5–10% on higher-volatility symbols

Trailing activation 1–3%, trailing 0.5–1.5% are common intraday starts

Plain-text examples
• BTCUSDT 1h → RSI 9, lbL 1, lbR 3, Min strength 5.0, Volume gate 1.0, SL 4.5%, Trail on 2.0%, Trail 1.0%.
• SPY 15m → RSI 8, lbL 1, lbR 3, Min strength 7.0, Volume gate 1.2, SL 3.0%, Trail on 1.5%, Trail 0.8%.
• EURUSD 4h → RSI 14, lbL 2, lbR 4, Min strength 4.0, Volume gate 1.0, SL 2.5%, Trail on 1.0%, Trail 0.5%.

Notes & limitations
• Pivot confirmation means the newest candidate pivot can move until lbR confirms it (expected).
• Results vary by timeframe/symbol/settings; always forward-test.
• Educational tool — no performance or profit claims.

Credits
• RSI by J. Welles Wilder Jr. (1978).
• Reference divergence script by eemani123:

• This version by tagstrading 2025 adds: improved pivot engine, RSIpivot gating, normalized strength + optional volume gate, delayed entries, rigid SL and activatable trailing, and a gap-free RSI gradient.