BullishDivergence (Function)

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The BullishDivergence function identifies lower occurrences of Pivot lows in one value, accompanied by higher Pivot lows in another value. A Pivot Low is a significant low value preceded and proceeded by some number of higher values.

BullishDivergence is normally identified when a price (Low) makes a Pivot low that is lower than the previous Pivot low, and an oscillator (Stochastic, RSI, Bollinger Bands) makes a Pivot low that is higher than the previous Pivot low.

Syntax

BullishDivergence(Price1,Price2,Strength,Length)

Returns (Integer)

The function returns a value of 1 if the BullishDivergence condition is True for the current bar, otherwise it returns 0.

Parameters

Name	Type	Description
Price1	Numeric	Specifies which bar value (price, function, or formula) to use for the first pivot point.
Price2	Numeric	Specifies which bar value (price, function, or formula) to use for the second pivot point.
Strength	Numeric	Sets the number of bars on either side of the pivot low point.
Length	Numeric	Sets the maximum number of bars between pivot low points.

Remarks

The input parameters Price1 and Price2 can be a bar value such as Close, High, Low, Open, or Volume. They can also be any mathematical calculation such as High + Low) / 2, or a numeric function such as RSI, Stochastic, or ADX.

Increasing the Strength input parameter will normally decrease the number of True occurrences.

Increasing the Length input parameter will normally increase the chances for True of occurrences.

The value for Length and Strength should always be a positive whole number greater than 0.

Example

Plots a ShowMe on the Low when a BullishDivergence occurs between a Pivot Low and the Pivot low of the RSI oscillator on any bar, where the Pivot Strength is 2 and the Pivot Length is 20:

if BullishDivergence(Low, RSI(Close,14), 2, 20) = 1 then

Plot1(Low, "BullDrvg");

Reference

Wilder, Welles, Jr. New Concepts in Technical Trading Systems. Trend Research. McLeansville, NC.