NLR-ADX Divergence Strategy Triple-Confirmed

How it works

Builds a cleaner DMI/ADX

• Recomputes classic +DI, −DI, ADX over a user-set length.
  
• Then “non-linear regresses” each series toward a mean (your choice: dynamic EMA of the series or a fixed Static Mid like 50).
  
• The further a value is from the mean, the stronger the pull (controlled by alphaMin/alphaMax and the γ exponent), giving smoother, more stable DI/ADX lines with less whipsaw.
  
• Optional EMA smoothing on top of that.
  
• Lock in values at confirmed pivots
  
• Uses price pivots (left/right bars) to confirm swing lows and highs.
  
• When a pivot confirms, the script captures (“freezes”) the current +DI, −DI, and ADX values at that bar and stores them. This avoids later drift from smoothing/EMAs.
  

Check for triple divergence

1. For a bullish setup (potential long):
   
2. Price makes a Lower Low vs. a prior pivot low,
   
3. +DI is higher than before (bulls quietly stronger),
   
4. −DI is lower (bears weakening),
   
5. ADX is lower (trend fatigue).
   

For a bearish setup (potential short)

1. Price makes a Higher High,
   
2. +DI is lower, −DI is higher,
   
3. ADX is lower.
   
4. Adds a “no-intersection” sanity check: between the two pivots, the live series shouldn’t snake across the straight line connecting endpoints. This filters messy, low-quality structures.
   

Trade logic

• On a valid triple-confirm, places a strategy.entry (Long for bullish, Short for bearish) and optionally labels the bar (BUY or SELL with +DI/−DI/ADX arrows).
  
• Simple flip behavior: if you’re long and a new short signal prints (or vice versa), it closes the open side and flips.
  

Key inputs you can tweak

• Custom DMI Settings
  
• DMI Length — base length for DI/ADX.
  
• Non-Linear Regression Model
  
• Mean Reference — EMA(series) (dynamic) or Static mid (e.g., 50).
  
• Dynamic Mean Length & Deviation Scale Length — govern the mean and scale used for regression.
  
• Min/Max Regression & Non-Linearity Exponent (γ) — how strongly values are pulled toward the mean (stronger when far away).
  

Divergence Engine

• Pivot Left/Right Bars — how strict the swing confirmation is (larger = more confirmation, more delay).
  
• Min Bars Between Pivots — avoids comparing “near-duplicate” swings.
  
• Max Historical Pivots to Store — memory cap.