OPEN-SOURCE SCRIPT
VWDMD Pro: Precision Divergence & Volatility
VWDMD Pro: Volume-Weighted Dynamic Momentum & Divergence
What is VWDMD Pro?
VWDMD (Volume-Weighted Dynamic Momentum Index) is an advanced momentum oscillator designed to filter out market noise by integrating price action with logarithmic volume analysis. Unlike traditional oscillators (like RSI or Stochastic) that treat every price move equally, VWDMD assigns higher significance to moves backed by institutional volume.
The Problem It Solves
Most momentum indicators suffer from two main issues:
Lags and Noise: Standard oscillators often provide false signals during low-volatility periods.
Fixed Thresholds: Static Overbought/Oversold levels (like 70/30) fail to adapt to changing market volatility.
VWDMD Pro addresses these by:
Using Logarithmic Volume Sensitivity to prioritize "heavy" price moves.
Implementing Adaptive Volatility Bands based on Standard Deviation, which expand and contract according to market conditions.
Filtering signals through a Global Trend Filter (200 EMA) to ensure you are not trading against the primary market direction.
How to Use and Interpret
This script identifies four types of high-probability divergences:
Regular Bullish (BUY): Price makes a Lower Low, but VWDMD makes a Higher Low. Signals a potential trend reversal to the upside.
Regular Bearish (SELL): Price makes a Higher High, but VWDMD makes a Lower High. Signals a potential trend reversal to the downside.
Hidden Bullish (H-BUY): Price makes a Higher Low, but VWDMD makes a Lower Low. This is a powerful trend continuation signal.
Hidden Bearish (H-SELL): Price makes a Lower High, but VWDMD makes a Higher High. Confirms that the downtrend is likely to continue.
Key Features
Dynamic Histogram: Colors change based on momentum slope (darker colors indicate weakening momentum).
Trend Context Background: The chart background is colored based on the 200 EMA to keep you on the right side of the trend.
Auto-Drawing Lines: Divergence lines are automatically plotted on the oscillator for clear visualization.
Real-time Dashboard: A compact UI showing current Trend and Momentum status.
Best Practices for Trading
Higher Timeframes: Works best on 1H, 4H, and Daily charts for US500, Gold, and Major Forex pairs.
Trend Alignment: Prioritize Hidden Divergences when the background is Green (Bullish) or Red (Bearish). These are often the most reliable "dip-buying" opportunities.
Confirmation: Use the Overbought/Oversold triangle markers as initial warnings, but wait for a Divergence label for entry confirmation.
What is VWDMD Pro?
VWDMD (Volume-Weighted Dynamic Momentum Index) is an advanced momentum oscillator designed to filter out market noise by integrating price action with logarithmic volume analysis. Unlike traditional oscillators (like RSI or Stochastic) that treat every price move equally, VWDMD assigns higher significance to moves backed by institutional volume.
The Problem It Solves
Most momentum indicators suffer from two main issues:
Lags and Noise: Standard oscillators often provide false signals during low-volatility periods.
Fixed Thresholds: Static Overbought/Oversold levels (like 70/30) fail to adapt to changing market volatility.
VWDMD Pro addresses these by:
Using Logarithmic Volume Sensitivity to prioritize "heavy" price moves.
Implementing Adaptive Volatility Bands based on Standard Deviation, which expand and contract according to market conditions.
Filtering signals through a Global Trend Filter (200 EMA) to ensure you are not trading against the primary market direction.
How to Use and Interpret
This script identifies four types of high-probability divergences:
Regular Bullish (BUY): Price makes a Lower Low, but VWDMD makes a Higher Low. Signals a potential trend reversal to the upside.
Regular Bearish (SELL): Price makes a Higher High, but VWDMD makes a Lower High. Signals a potential trend reversal to the downside.
Hidden Bullish (H-BUY): Price makes a Higher Low, but VWDMD makes a Lower Low. This is a powerful trend continuation signal.
Hidden Bearish (H-SELL): Price makes a Lower High, but VWDMD makes a Higher High. Confirms that the downtrend is likely to continue.
Key Features
Dynamic Histogram: Colors change based on momentum slope (darker colors indicate weakening momentum).
Trend Context Background: The chart background is colored based on the 200 EMA to keep you on the right side of the trend.
Auto-Drawing Lines: Divergence lines are automatically plotted on the oscillator for clear visualization.
Real-time Dashboard: A compact UI showing current Trend and Momentum status.
Best Practices for Trading
Higher Timeframes: Works best on 1H, 4H, and Daily charts for US500, Gold, and Major Forex pairs.
Trend Alignment: Prioritize Hidden Divergences when the background is Green (Bullish) or Red (Bearish). These are often the most reliable "dip-buying" opportunities.
Confirmation: Use the Overbought/Oversold triangle markers as initial warnings, but wait for a Divergence label for entry confirmation.
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.
Skrypt open-source
W zgodzie z duchem TradingView twórca tego skryptu udostępnił go jako open-source, aby użytkownicy mogli przejrzeć i zweryfikować jego działanie. Ukłony dla autora. Korzystanie jest bezpłatne, jednak ponowna publikacja kodu podlega naszym Zasadom serwisu.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.