Opit78 Smart Money Oscillator

Smart Money Oscillator (SM Osc)** is a volume-based momentum oscillator designed to highlight the *behavioral difference between Smart Money and Crowd participation* using a normalized PVI/NVI spread.

Unlike traditional oscillators, SM Osc does **not attempt to predict tops or bottoms**.
Its purpose is to **confirm or invalidate price movements** by showing *who is actually behind the move*.

---

### 🔍 **Core Concept**

The indicator is built on:

* **Positive Volume Index (PVI)** – price movement on increasing volume (crowd-driven activity)
* **Negative Volume Index (NVI)** – price movement on decreasing volume (smart money activity)

The logarithmic spread between PVI and NVI is transformed into a **Z-score (auto-scaled)**, producing a stable oscillator that adapts to any market, symbol, or timeframe.

---

### 📊 **How to Read the Oscillator**

* **Above 0** → Movement dominated by *crowd / high-volume participation*
* **Below 0** → Movement dominated by *smart money / low-volume participation*
* **Momentum color**:

* Green → oscillator rising
* Red → oscillator falling

The indicator focuses on **structure, not signals**.

---

### 🔁 **Divergences (Filtered)**

SM Osc highlights **high-quality divergences only**:

* Bullish Divergence:

* Price makes Lower Low
* Oscillator makes Higher Low (below 0)
* Bearish Divergence:

* Price makes Higher High
* Oscillator makes Lower High (above 0)

To reduce noise:

* Divergences are filtered by **minimum σ distance**
* Optional **|σ| zone filter** ensures divergences appear only at statistically meaningful extremes

This prevents over-signaling on lower timeframes.

---

### 🧭 **Multi-Timeframe Use**

* **Higher Timeframes (H1 / H4 / Daily)**
→ Define market bias (accumulation vs distribution)
* **Lower Timeframes (M1 / M5 / M15)**
→ Fine-tune timing within the higher-timeframe context

SM Osc works best when combined with **price structure and trend analysis**.

---

### ⚠️ **Important Notes**

* This indicator is **not a standalone trading system**
* It does **not provide buy/sell signals**
* Best used as a **confirmation and filtering tool**

---

### ✅ **Best Use Cases**

* Confirming trend strength or weakness
* Identifying accumulation vs distribution phases
* Filtering false breakouts
* Managing trades (exit / reduce / avoid entries)

---

**Smart Money Oscillator shows *who is in control*, not where price must go next.**