SMT Divergences [OutOfOptions]Smart Money Technique (SMT) Divergence is designed to identify discrepancies between correlated assets within the same timeframe. It occurs when two related assets exhibit opposing signals, such as one forming a higher low while the other forms a lower low. This technique is particularly useful for anticipating market shifts or reversals before they become evident through other Premium Discount (PD) Arrays.
This indicator works by identifying the highs and lows that have formed for an asset on the current chart and the correlated symbol defined in the settings. Once a pivot on either asset is formed, it checks if the pivot has taken liquidity as identified by the previous pivot in the same direction (i.e., a new high taking out a previous high). If this is the case and the corresponding asset has not taken a similar pivot, the condition is determined to be a potential valid divergence. The indicator will then filter out SMTs formed by adjacent candles, requiring at least one candle difference between the candles forming the SMT.
If the “Candle Direction Validation” setting is enabled, the indicator will further check both assets to ensure that for bullish SMTs, the last high on both assets was formed by down candle, and for bearish SMTs, the low was formed by an up candle. This check can often eliminate low-probability SMTs that are frequently broken.
The referenced chart shows divergence between Nasdaq (NQ) and S&P 500 (ES) futures, which are normally closely correlated assets that move in the same direction. The lines shown represent bullish and bearish divergences between the two when they are formed. As you can see from the chart, SMT Divergences may not always indicate a reversal, or a reversal might be just a short-term retrace. Therefore, SMT Divergences should not be used independently. However, in conjunction with other PD arrays, they can provide strong confirmation of a change in market direction.
Configurability:
Pivot strength - Indicates how many bars to the left/right of a high for pivot to be considered, recommended to keep at 1 for maximum detection speed
Candle Direction Validation - Additional SMT validation to filter out weak/low-probability SMTs be examining candle direction
Line Styling for Bullish/Bearish SMTs - Ability to customize line style, color & width for bullish/bearish SMTs
Label Control - Whether or not to show SMT label and if shown what font size & color should be used
What makes this indicator different:
Unlike other SMT indicators, this indicators has additional built-in controls to remove low-probability SMTs
Smtdivergence
SMT/Divergence Suite (any Indicator)Hello Traders!
The TRN SMT/Divergence Suite detects divergences for any given indicator, even custom ones and divergences any two given instruments (SMT – smart money technique/tool). The indicator finds with unrivaled precision bullish and bearish as well as regular and hidden divergences. The main difference compared to other SMT/divergences indicators is that this indicator finds rigorously the extreme peaks of each swing, both in price and in the corresponding indicator/instrument. This precision is unmatched and therefore this is one of the best SMT/divergences detectors. The indicator helps traders to identify potential changes in trend before they occur.
Feature List
Works with any given custom oscillators or indicator
SMT (Smart Money Technique)/Divergence detecting for any given instruments
11 different build-in oscillators (incl. Cumulative Delta)
Customizable look and feel
The TRN SMT/Divergence Suite works with any given indicator, even custom ones. In addition, there are 11 built-in indicators. We have chosen a selection of different momentum, trend following and volume oscillators that gives you maximum flexibility. Most noticeable is the cumulative delta indicator, which works astonishingly well as a divergence indicator.
Following is the full list of the build in indicators/oscillators:
Awesome Oscillator (AO)
Commodity Channel Index (CCI)
Cumulative Delta Volume (CDV)
Chaikin Money Flow (CMF)
Moving Average Convergence Divergence (MACD)
Money Flow Index (MFI)
Momentum
On Balance Volume (OBV)
Relative Strength Index (RSI)
Stochastic
Williams Percentage Range (W%R)
The divergences are colored with vivid lines and labels. Bullish divergences are distinguished with luminous blue lines, while bearish divergences are denoted by striking red lines. Upon detecting a divergence, the colored lines act as a visual indicator for traders, signaling an imminent possibility of a trend reversal. In response, traders can leverage this valuable insight to make informed decisions in their trading activities.
Choose Your Custom Divergence Indicator
Handpick your custom indicator, and the TRN SMT/Divergence Suite will hunt for divergences in your preferred market and timeframe. Importantly, you must add the indicator to your chart. Afterwards, simply go to the “Parameters” section in the indicator settings and choose "External Indicator/SMT". If the custom indicator has one reference value, then choose this value in the “External Indicator/SMT (High)” field. If there are high and low values (e.g. candles), then you also must set the “External Indicator Low/SMT” field.
In the provided graphic, we've chosen the stochastic RSI as our example, and as you can see, the TRN SMT/Divergence Suite instantly identifies and plots bullish and bearish divergences on your chart.
Make sure that the TRN SMT/Divergence Suite is in the same panel as the custom divergence indicator and that both indicators are pinned to the same scale of your chart.
Smart Money Technique (SMT)/Divergence detecting in Relation to other Instruments
Smart Money Technique/Tool (SMT) means the divergence detection between two related instruments. The TRN SMT/Divergence Suite finds divergences in relation to other instruments, e.g. NQ vs. ES or BTCUSDT vs. ETHUSDT. Just add another instrument to the chart. As representation style you can choose lines or candles/bars. Afterwards, simply go to the “Parameters” section in the indicator settings and choose "External Indicator/SMT". If the second instrument is represented as line, then choose this value in the “External Indicator/SMT (High)” field. If there are high and low values (e.g. candles/bars), then you also must set the “External Indicator/SMT Low” field.
The detection of SMTs can help traders to decide whether the trend continues, or a reversal is imminent. E.g. if the NQ makes a new higher high but the ES fails to do so and makes a new lower high, then the TRN SMT/Divergence Suite shows a divergence. As a result, the probability is high that the trend will not continue, and the trader can make an informed decision about what to do next.
How to set Parameters for Divergence Indicators
To begin, access the indicator settings. Look for the "Parameters" section where you can fine-tune Parameters 1-3. The default settings are already optimized for the oscillators AO, RSI, CDV, W%R, MFI and Stochastic. For other divergence indicators, you might want to adjust the settings to your liking. The parameter order is the same as in the corresponding divergence indicator.
What are Divergences?
When the price of an asset moves in one direction, but its indicators move in the opposite direction, this is called a divergence. Divergences can be a powerful signal that a trend reversal is about to occur.
There are two types of regular divergences: bullish and bearish. A bullish divergence occurs when the price of an asset makes a lower low, but its indicators make a higher low. This can be a sign that the asset is oversold and that a reversal is imminent. A bearish divergence, on the other hand, occurs when the price of an asset makes a higher high, but its indicators (such as Relative Strength Index - RSI) make a lower high. This can be a sign that the asset is overbought and that a reversal is imminent.
Next to regular divergences there are hidden divergences. These divergences occur when the price of an asset moves in the opposite direction of an indicator, suggesting a possible shift in the underlying trend. In trading, hidden bearish and hidden bullish divergences are patterns that traders often look for on price charts to identify potential trend reversals or continuation patterns.
Conclusion
While signals from TRN SMT/Divergence Suite can be informative, it is important to recognize that their reliability may vary. Bearish and bullish divergences are not foolproof indicators and should be used in conjunction with other analysis techniques and risk management strategies.
Risk Disclaimer
The content, tools, scripts, articles, and educational resources offered by TRN Trading are intended solely for informational and educational purposes. Remember, past performance does not ensure future outcomes.
Trend and Reversal ScannerHello Traders!
The TRN Trend and Reversal Scanner highlights in a user-friendly and easy to read table trend and reversal signals from up to 20 assets of your choosing. With it, you can efficiently monitor your preferred instruments simultaneously without jumping from one chart to the next. You will never miss a signal again. The indicator automatically finds swing-based up and down trends, bullish and bearish divergences, detects ranges and range breakouts as well as trend and reversal signals by the built-in trend detection algorithm called TRN Bars. Furthermore, you can conveniently stay updated with real-time alerts, notifying you whenever the scanner finds interesting market situations.
Feature List
Swing-based up and down trend detection
Divergence detection for any given (Custom) Indicator
Price range and breakout detection
Bar trend and reversal detection
Scanner alerts
The value of this indicator is to support traders to easily identify trend-based signals in an automated way and across many different markets at the same time. The trader saves a lot of time scanning the markets for up and down swings, divergences, consolidations and bar pattern-based trends and reversals, since finding and alerting these signals is done automatically for the trader.
For a visualization of the detected signals, you can add the TRN Bars and the Swing Suite indicator to your chart.
How does Trend Scanner work?
On the right side of the chart, you can find a table displaying the symbols monitored by the TRN Trend and Reversal Scanner for signal detection (first column). The table provides information on the status of each symbol. This visual representation allows you to quickly identify evolving signals across different symbols, helping you stay informed and make timely trading decisions.
The scanner operates specifically on the timeframe you are currently viewing, ensuring that the detected signals align precisely with your trading perspective.
In the following, we will describe the different signals displayed in the different columns of the table
Column 1 – Symbols
Column 2 – Bar Trend & Signals
Column 3 – Up & Down Swing Trend
Column 4 – Ranges & Range Breakouts
Column 5 – Bullish Divergences
Column 6 – Bearish Divergences
Bar Trend & Signals
In the second column, you can observe the status of TRN Bars, the built-in trend detection algorithm.
UP – Uptrend
DN – Downtrend
REV (Green) – Bullish Reversal Bar
REV (Red) – Bearish Reversal Bar
CON (Green) – Bullish Continuation Bar
CON (Red) – Bearish Continuation Bar
B/O (Green) – Bullish Range Breakout Bar
B/O (Red) – Bearish Range Breakout Bar
TRN Bars is designed to spot bullish and bearish trends and reversals. The trend analysis is based on a new algorithm that weights several different inputs:
classical and advanced bar patterns and their statistical frequency
probability distributions of price expansions after certain bar patterns
bar information such as wick length in %, overlapping of the previous bar in % and many more
historical trend and consolidation analysis
It provides high-probability trend continuation analysis and reversal detections.
Up and Downtrend
The second column (Trend) indicates whether the price of the asset moves within an uptrend (UP) or a downtrend (DN), as detected by our unique swing detection algorithm, on the selected timeframe.
The swing detection algorithm identifies pivot points (swings) with high accuracy. It works in real-time and does not need a look-a-head to find swings.
Ranges & Range Breakouts
The third column provides insights into the price behavior of a symbol within the selected timeframe, as analyzed by the range feature of the TRN Bars algorithm.
ACTIVE – Price moves within a price range
UP – Breakout detected
DN – Breakdown detected
UP CONF – Breakout confirmed
DN CONF – Breakdown confirmed
The bar range feature automatically finds consolidations where the price range of several consecutives bars is rather small. The detection of the bar ranges includes among other things the overlapping percentage of these bars.
Divergence Detection for any given (Custom) Indicator
The divergence detector finds with unrivaled precision bullish and bearish as well as regular and hidden divergences. The main difference compared to other divergences indicators is that this indicator finds rigorously the extreme peaks of each swing, both in price and in the corresponding indicator. This precision is unmatched and therefore this is one of the best divergences detectors.
The build in divergence detector works with any given indicator, even custom ones. In addition, there are 11 built-in indicators. Most noticeable is the cumulative delta indicator, which works astonishingly well as a divergence indicator. Full list:
External Indicator (see next section for the setup)
Awesome Oscillator (AO)
Commodity Channel Index (CCI)
Cumulative Delta Volume (CDV)
Chaikin Money Flow (CMF)
Moving Average Convergence Divergence (MACD)
Money Flow Index (MFI)
Momentum
On Balance Volume (OBV)
Relative Strength Index (RSI)
Stochastic
Williams Percentage Range (W%R)
Another highlight of the divergence detection is that it works with every indicator, even custom ones. To do this, you must add the (custom) indicator to your chart. Afterwards, simply go to the “Divergence Detection” section in the indicator settings and choose "External Indicator". If the custom indicator has one reference value, then choose this value in the “External Indicator (High)” field. If there are high and low values (e.g. candles), then you also must set the “External Indicator Low” field.
The visualization of the divergence detection is represented in the fifth column (Div Bull) and the sixth and last column (Div Bear).
REG – Regular divergence detected
HID – Hidden divergence detected
Scanner Alerts
You can opt to receive alerts for the following scenarios:
Detected up and down swings
Detected bullish and bearish divergences
Detected bar trend changes
Confirmed Reversal Bars
Confirmed Continuation Bars
Confirmed ange breakouts
The alert function is activated for all symbols listed in the scanner and corresponds to the timeframe of the chart you are currently viewing. This ensures that you receive alerts specifically tailored to the symbols and timeframe you are interested in.
Risk Disclaimer
The content, tools, scripts, articles, and educational resources offered by TRN Trading are intended solely for informational and educational purposes. Remember, past performance does not ensure future outcomes.
Swing Suite (SMT/Divergences + Gann Swings)Hello Traders!
TRN Swing Suite (SMT/Divergences + Gann Swings) is an indicator which identifies, and highlights pivot points (swings) and prints a lot of information about the swings in the chart (e.g. length, duration, cumulative Delta, ...). Furthermore, it detects divergences in connection with any given indicator, even custom ones. In addition to this, you can choose the algorithm to compute the swings. The famous Gann-Swing algorithm and the extremely precise TRN Swing algorithm (called Standard) are available for selection, as well as two other variants. Compared to other swing or zig-zag indicators it works in real-time, does not need a look-a-head to find swings and is not repainting. Moreover, equal (double) highs and lows are detected and displayed. The TRN Swing Suite helps traders to visualize the pure price action and identify key turning points or trends. The indicator comes with the following features:
Precise real-time swing detection without repainting
Divergence detecting for any given (custom) indicator - with 11 different preset indicators
SMT (Smart Money Technique)/Divergence detecting in relation to other instruments
Swing Performance Statistics
Swing support and resistance levels
Swing trend for multiple swing sizes
Equal/double high and low detection
4 different swing computation styles
Displaying of swing labels, values and information
Customizable settings as well as look and feel
It's important to note that the TRN Swing Suite is a visual tool and does not provide specific buy or sell signals. It serves as a guide for traders to analyze market structure in depth and make well-informed trading decisions based on their trading strategy and additional technical analysis.
Divergence Detection for any given (Custom) Indicator
The divergence detector finds with unrivaled precision bullish and bearish as well as regular and hidden divergences. The main difference compared to other divergences indicators is that this indicator finds rigorously the extreme peaks of each swing, both in price and in the corresponding indicator. This precision is unmatched and therefore this is one of the best divergences detectors.
The build in divergence detector works with any given indicator, even custom ones. In addition, there are 11 built-in indicators. Most noticeable is the cumulative delta indicator, which works astonishingly well as a divergence indicator. Full list:
External Indicator (see next section for the setup)
Awesome Oscillator (AO)
Commodity Channel Index (CCI)
Cumulative Delta Volume (CDV)
Chaikin Money Flow (CMF)
Moving Average Convergence Divergence (MACD)
Money Flow Index (MFI)
Momentum
On Balance Volume (OBV)
Relative Strength Index (RSI)
Stochastic
Williams Percentage Range (W%R)
The divergences are colored with vivid lines and labels. Bullish divergences are distinguished with luminous blue lines, while bearish divergences are denoted by striking red lines. Upon detecting a divergence, the colored lines act as a visual indicator for traders, signaling an imminent possibility of a trend reversal. In response, traders can leverage this valuable insight to make informed decisions in their trading activities.
Choose Your Custom Divergence Indicator
Handpick your custom indicator, and the TRN Swing Suite will hunt for divergences on your preferred market and timeframe. Importantly, you must add the indicator to your chart. Afterwards, simply go to the “Divergence Detection” section in the TRN Swing Suite indicator settings and choose "External Indicator". If the custom indicator has one reference value, then choose this value in the “External Indicator (High)” field. If there are high and low values (e.g. candles), then you also must set the “External Indicator Low” field.
In the provided graphic, we've chosen the stochastic RSI as our example, and as you can see, the TRN Swing Suite instantly identifies and plots bullish and bearish divergences on your chart.
Smart Money Technique (SMT)/Divergence detecting in Relation to other Instruments
Smart Money Technique/Tool (SMT) means the divergence detection between two related instruments. The TRN Swing Suite finds divergence in relation to other instruments, e.g. NQ vs ES or BTCUSDT vs ETHUSDT. Just add another instrument to the chart. As representation style you can choose lines or candles/bars. Afterwards, simply go to the “Divergence Detection” section in the TRN Swing Suite indicator settings and choose "External Indicator". If the second instrument is represented as line, then choose this value in the “External Indicator (High)” field. If there are high and low values (e.g. candles/bars), then you also must set the “External Indicator Low” field.
The detection of SMTs can help traders to decide whether the trend continues, or a reversal is imminent. E.g. if the NQ makes a new higher high but the ES fails to do so and makes a new lower high, then the TRN Swing Suite shows a divergence. As a result, the probability is high that the trend will not continue, and the trader can make an informed decision about what to do next.
How to Set Parameters for Divergence Indicators
To begin, access the indicator settings and find the “Divergence Detection”. Look for the "Parameters" sections where you can fine-tune Parameters 1-3. The default settings are already optimized for the oscillators AO, RSI, CDV, W%R, MFI and Stochastic. For other divergence indicators, you might want to adjust the settings to your liking. The parameter order is the same as in the corresponding divergence indicator.
TRN Swing Suite Statistics
Unveil the untapped potential of advanced Swing Statistics! Gain invaluable insights into historical swings and turning points. Elevate your expertise by harnessing this treasure trove of data to supercharge signal reliability, while masterfully planning stop loss and take profit strategies with unrivaled accuracy. Within the TRN Swing Suite lie two powerful statistics, each offering distinct insights to empower your trading prowess.
Swing Statistic
The Swing Statistic comprises of two series, one for up swings (Up) and one for down swings (Down), with values given in points. The columns have the following meaning:
Up or down
# - total number of analyzed swings
Overall ∅ Length - average length of all swings in points
Overall ∅ Duration - average duration of swings in bars
∅ Length - average lengths for custom-defined swing counts
∅ Duration - average durations for custom-defined swing counts
The custom-defined swing count is used to determine the swing length/duration for the last x swings. Note, in the case of well-established assets like Microsoft or Nvidia, which have undergone one or more stock splits, the overall average in column three may deviate significantly from those in column five. That is why column 5 is useful.
Relation Statistic
The Relation Statistic highlights percentages representing the historical occurrence of specific high and low sequences. In the first column (in %), various types of highs and lows are listed as reference points.
For example, the first row corresponds to "HH followed by", where the second column (#) displays the total count of higher highs (HH) considered. The subsequent columns showcase the percentages of how often certain patterns follow the initial HH.
Fields marked in blue represent sequences that occurred in over 50% of cases. The darker the shade of blue in each field, the higher the percentage.
Use Swing Statistics to Validate Stop-Loss and Take-Profit Levels
No matter which signals you choose to trade, consulting Swing Statistics can significantly enhance the reliability of these signals.
For example, when looking for a long entry after a lower low (LL), you can examine the likelihood of a subsequent lower high (LH) or even a higher high (HH). Combining this valuable information with your predetermined Take Profit level allows you to better assess whether your target can be achieved successfully. Additionally, you can add the average up swing length to the lower low for an alternative Take Profit level. Similarly, you can verify the probability of the next low being a higher low (HL) or another lower low (LL) to determine the likelihood of your Stop Loss being triggered. Align the length of the last down swing with the average down swing length for an alternative Stop Loss.
Swing Support and Resistance Levels
Swing support and resistance levels are horizontal lines starting from a swing high or swing low and representing natural support and resistance levels. Price tends to respect this levels one way or another. In most cases, old swing highs and swing lows provide a lot of liquidity to the market. For example, for a swing high there are at least three different market players at work:
Traders put there stop loss above the swing high
Breakout traders go long above the swing high
Turtle soup (reverse) trader go short above the swing high
Swing Trend (Multiple Sizes)
The TRN Swing Suite can display either at the top or at the bottom the prevailing swing trends for the main trend seen in the chart and for two additional swing sizes. This is useful to see the swing trend for medium and bigger swings to get a clear picture of the market.
Getting an Edge with the TRN Swing Suite
The indicator clearly displays up trends, defined as a sequence of higher highs (HH) and higher lows (HL), with green labels and down trends, defined as a sequence of lower lows (LL) and lower highs (LH), with red labels. Equal highs/double tops (DT) and equal lows/ double bottoms (DB) are highlighted in gold.
In addition, the labels show a full stack of valuable information about the swings to maximize your accuracy.
Length
Length percentage in relation to the last swing length
Duration
Time
Volume
Cumulative Delta
In an uptrend the up swings should have higher volume und higher cumulative delta than the down swings. The duration and time for down swings in an uptrend should be shorter than for the up swings.
Use Cases for Swing Detection
Trend Identification
By connecting the swing highs and lows, traders can identify and analyze the prevailing trend in the market. An uptrend is characterized by higher swing highs and lows, while a downtrend is characterized by lower highs and lower lows. The indicator helps traders visually assess the strength and continuity of the trend.
Support And Resistance Levels
The swing highs and lows can act as support and resistance levels. Swing highs may act as resistance levels where selling pressure increases, while swing lows may act as support levels where buying pressure increases. Traders often pay attention to these levels as potential areas for trade entries, exits, or placing stop-loss orders.
Pattern Recognition
The swings identified by the indicator can help traders recognize chart patterns, such as equal high/lows, consolidations, wedges, triangles or more complex patterns like Gartley or Head and Shoulders. These patterns can provide insights into potential trend continuation or reversal.
Trade Entry and Exit
Traders may use TRN Swing to determine potential trade entry and exit points. For example, in an uptrend, traders may look for opportunities to enter long positions near swing lows or on pullbacks to support levels. Conversely, in a downtrend, traders may consider short positions near swing highs or on retracements to resistance levels.
Swing Styles
In addition to the standard swings, you have the flexibility to choose between various swing styles, including ticks, percent, or even the famous Gann swings.
Standard
Gann
Ticks
Percent
Conclusion
While signals from TRN Swings can be informative, it is important to recognize that their reliability may vary. Various external factors can impact market prices, and it is essential to consider your risk tolerance and investment goals when executing trades.
Risk Disclaimer
The content, tools, scripts, articles, and educational resources offered by TRN Trading are intended solely for informational and educational purposes. Remember, past performance does not ensure future outcomes.
SMT Divergences [LuxAlgo]The SMT Divergences indicator highlights SMT divergences between the chart symbol and two user-selected tickers (ES and YM by default).
A dashboard returning the SMT divergences statistics is also provided within the settings.
🔶 SETTINGS
Swing Lookback: Calculation window used to detect swing points.
Comparison Ticker: If enabled, will detect SMT divergences between the chart prices and the prices of the selected ticker.
🔹 Dashboard
Show Dashboard: Displays statistics dashboard on the chart.
Location: Location of the dashboard on the chart.
Size: Size of the displayed dashboard.
🔶 USAGE
SMT Divergences are characterized by diverging swing points between two securities.
The detection of SMT Divergences is performed by detecting swing points using the user chart prices as well as the prices of the selected external tickers. If a swing point on the chart ticker is detected at the same time on external tickers, comparison is performed.
Due to the detection requiring swing point confirmation (3 candles by default), this indicator can better be used to study price behaviors on the occurrence of an SMT divergence.
The dashboard highlights the number of SMT divergences that occurred on a swing high and swing low between the chart ticker and the selected external tickers.
The returned percentage indicates the proportion of swing highs or swing lows that led to an SMT divergence.
SMT Divergence [TFO]Smart Money Technique ( SMT ) Divergence is meant to annotate divergences between closely correlated assets. This indicator works by finding local lows and highs for both the current chart symbol and the symbol defined in the settings. It compares both symbols' pivots and evaluates whether they indicate a valid divergence (based on where they're located, whether they make opposing highs/lows, whether a clean connection can be made, etc.).
Take $ES_F and $NQ_F for example ( S&P 500 and Nasdaq 100 U.S. index futures ). These two names normally track each other very closely (and in the same direction, versus something like $DXY ), but if $ES_F is steadily rising towards a large institutional level and making higher highs, while $NQ_F is approaching a similarly important level and making lower highs on that same timeframe, this would indicate a divergence between the two assets that could foreshadow a “Smart Money Reversal.”
We can look at diverging highs at resistance as potential reason to look for low timeframe reversal structure to get short, and likewise look at diverging lows near support as potential reason to look for reversal structure to get long. As with most trading concepts, the higher timeframes here are key in this analysis. Divergence on a 4h chart can be much more telling than divergence on a 1m chart; but assuming a higher timeframe bias is already formulated, then SMT could simply act as an additional confluence tool to enter a trade.
