MACD_DIXCHANGE with Divergences and Target Prices

Summary

This indicator is an advanced momentum oscillator, inspired by the work of DAVIDGLZ. It is designed to help traders visualize the strength and direction of the current trend, identify potential market exhaustion or turning points through automatic divergence detection, and provides key reference levels and price estimates for a more comprehensive analysis.

Main Tools and Features

Main Oscillator: The colored line that fluctuates above and below a central zero line.
· Its position (above/below zero) indicates the general direction of momentum
(bullish/bearish).
· Its color changes gradually (typically green/lime for bullish, red/maroon for bearish) and
can suggest the strength of that momentum.

Signal Line: A smoothed version (moving average) of the main line. Crossovers between the main line and the signal line are key events that can generate early warning signals of potential changes.

Histogram (MACD Style): The vertical bars representing the difference (strength) between the Main Oscillator and its Signal Line.
· The height of the bars indicates the magnitude of the difference.
· Its colors change to help visualize whether momentum is accelerating (brighter colors like
Lime Green or Red) or decelerating (darker colors like Green or Maroon).

Key Horizontal Levels: Three reference lines: an Upper Level, a Lower Level (both user-configurable), and the central Zero Line. The area between the upper and lower levels is shaded, creating a visual "operating zone". These levels help identify when the oscillator reaches zones considered relatively over-extended.

Crossover Alerts: Small visual triangles (green for bullish crossover, red for bearish) that mark exactly when the Main Oscillator crosses its Signal Line.

Automatic Divergence Detector: A powerful tool that compares price movement with the Histogram's movement to find discrepancies:


· Detects Regular Bullish Divergences: Price makes lower lows, but the Histogram makes higher lows (potential bottom).

· Detects Regular Bearish Divergences:Price makes higher highs, but the Histogram makes lower highs (potential top).

Divergence Visualization: When a divergence is detected, it automatically draws:


· A dotted line directly on the Histogram connecting the two relevant lows (bullish) or highs (bearish) that form the divergence.
·A small "DIV" text label positioned centered on the midpoint of that dotted divergence line.


Estimated Price Labels: Very useful contextual information displayed to the right of the indicator (only on the last chart bar):

· Shows the approximate price the asset would need to reach right now for the Main Oscillator to touch the Upper Level (H ≈ ...), the Lower Level (L ≈ ...), the Zero Line (Mid ≈ ...), or the crossover point with the Signal Line (Cruce ≈ / Cross ≈ ...). These are dynamic estimates, not fixed predictions.

· Optional Background Color ("Double Peak" Pattern): (If enabled in settings) The indicator's panel background changes to green or red to highlight a specific condition: when the histogram forms two impulses ("mountains") in the same direction, and the second impulse begins to show signs of exhaustion by retreating towards zero.

·Information Panel: Displays the stylized name of the indicator in the bottom-right corner.


How to Interpret and Use the Tools


· Trend and Momentum: Use the Main Oscillator's position (above/below zero) and its crossovers with the Signal Line as basic directional indicators. Confirm strength and acceleration with the Histogram.

· Reversal Signals: Divergences are key signals of potential trend exhaustion. A bullish divergence after a downtrend, or a bearish divergence after an uptrend, warns of a possible change in direction. Important: Do not trade divergences alone; always seek confirmation (price action, patterns, other indicators).

· Extreme Conditions: Use the Upper and Lower Levels as guides to identify when the indicator reaches relatively overextended zones, where a pullback or pause might be more likely.

· Price Context: The Estimated Price Labels help you relate the indicator's levels to specific price points on the asset in the current moment.

· Exhaustion Signal (Background): If the background color feature is active, use it as an additional alert that a secondary push in the histogram might be failing.

Configuration

The indicator offers a wide range of customizable settings via its Inputs:

· Adjust the "speed" or sensitivity of the Main Oscillator (by changing its Moving Average settings).
· Adjust the smoothing of the Signal Line.
· Define your own Upper and Lower Horizontal Levels.
· Adjust the sensitivity of Divergence detection (by changing pivot parameters).
· Enable or disable most visual features (divergence lines/labels, price labels, optional
background color).

"This indicator is intended for use on timeframes of 3 minutes or higher and comes pre-configured with functional default settings. Modifying these settings may alter the original intended functionality of the indicator."

Disclaimer

This indicator is a tool for technical analysis and should not be considered investment advice or an infallible signal. Trading involves risks. Use this indicator as part of a well-defined trading strategy, alongside other analysis tools and proper risk management. Always conduct your own research.

Credits

Based on the original concept "Insane MACD_DIXCHANGE" by DAVIDGLZ, with multiple enhancements and added functionalities during development.

This English version should effectively convey the indicator's features and usage on TradingView.