Pluto Divergence is an advanced, RSI-based divergence indicator designed to highlight high-probability reversal and continuation opportunities with exceptional visual clarity and alert control. It operates in a separate window and uses a custom double-smoothed RSI midline to detect both classical and hidden divergences between price and momentum. This makes it suitable for scalping, swing trading, and higher-timeframe confirmation.
At its core, the indicator calculates a standard RSI, then applies a double EMA smoothing process to generate a refined midline. This smooth line reacts faster than traditional RSI while filtering noise. Divergences are detected by comparing confirmed peaks and lows of this smoothed RSI against price highs and lows, ensuring signals are based only on completed bars.
Classical divergences are used to anticipate potential reversals:
Bullish: price makes a lower low while the RSI midline makes a higher low
Bearish: price makes a higher high while the RSI midline makes a lower high
Hidden divergences are used to confirm trend continuation:
Bullish: price makes a higher low while the RSI midline makes a lower low
Bearish: price makes a lower high while the RSI midline makes a higher high
Signals are displayed as arrows in the indicator window, with optional divergence trend lines drawn both on the main price chart and directly on the indicator values. Solid lines represent classical divergences, while dotted lines represent hidden divergences. All visual elements can be individually enabled or disabled.
Pluto Divergence includes a comprehensive alert system. Alerts can be triggered on arrows, divergence lines, or both, and are available as pop-ups, sounds, and emails. Alerts are strictly fired only after candle close, preventing false or repeated signals on the same bar.
