The concept of coloring bars is nothing new and everyone does it for certain filters. However, the idea for using gradient color bars to spot price divergence may not be new, but has gone un-noticed by many.
The fact that no one (I know, there will be some claims to the contrary) has been able to write a decent divergence indicator is because computers can only follow rules and limits. Human eye on the other hand can spot a bird in the sky whether it is 100 yards away or 99.99999 or 100.00001, regardless of the number of decimals (yes, provided the person is not blind).
So, it makes sense if one can spot divergence by subtle changes in the gradient coloring of the bars where a computer might miss because it was not instructed to “see.”
This indicator is very simple and basic (as Fat Tails will put it, “child’s play”) and the bar coloring idea is not original. What I think is original (for future claims:sarcastic:) is applying the concept to a variety of conditions and filters to spot divergences (among other price behaviors) where the usual indicators and computers will miss most of the time.
This simple indicator has much potential. So, I am posting it here and hope some of you brilliant people will contribute to the idea. The current version is based on one filter that you can easily change. The goal is to bundle a number of filters and let the coloring be done based on the most relevant and promising filter.
As with any indicator (Stoch, RSI, etc.), this filter cannot be used on its own alone. I am considering to use one version of this indicator for confirming price action and formations at different time frames as a trading tool.
So, good luck and please feel free to post and contribute ideas and modifications on this thread. Please post any new revisions, templates, etc. under the second post of this thread until a complete version can be developed and placed in futures.io (formerly BMT) download area.
Stay positive, Thanks (thanks will lead to better versions:) ).
Cheers!!:beer:
Edits:
1. The most recent Version 3 of the indicator is located in Elite Download section of futures.io (formerly BMT).
