Orderflows Divergence is a composite divergence indicator that analyzes multiple order flow dimensions simultaneously before generating a signal. Rather than relying on a single metric like delta or CVD, it examines the structural relationship between price extremes and the underlying order flow data, producing higher-conviction signals at the cost of lower frequency.
How It Works
The indicator identifies structural price extremes (swing highs and swing lows) and then evaluates whether the underlying order flow metrics confirm or contradict the price move. A divergence is flagged only when price makes a new extreme but multiple order flow factors fail to support it.
Multi-Factor Analysis
The algorithm evaluates several order flow dimensions at each price swing:
- Delta trend: Is the net delta at the new extreme weaker than at the previous extreme?
- Volume characteristics: Does the volume profile at the new swing suggest genuine participation or thin-liquidity overshoot?
- Trade distribution: Are the trades concentrated or dispersed across price levels?
- Composite scoring: All factors are combined into a single divergence score. Only when the composite score exceeds an internal threshold is the signal generated.
This multi-factor approach filters out the many false divergences that single-metric indicators produce, especially in choppy or range-bound markets.
Signal Types
| Signal | Price Action | Order Flow | Interpretation |
|---|
| Bearish divergence | Higher high | Order flow metrics weaker at the new high | Rally is losing structural support. Multiple dimensions of buying pressure are declining. |
| Bullish divergence | Lower low | Order flow metrics weaker at the new low | Decline is losing structural support. Multiple dimensions of selling pressure are declining. |
Settings
Detection Parameters
| Parameter | Description | Default |
|---|
| lookbackPeriod | Number of bars scanned for swing point detection. Larger values detect longer-term structural divergences. | 50 |
| localExtremumPeriod | Number of bars on each side required to confirm a swing high or low. Higher values demand more established price pivots. | 3 |
| minDistanceBetweenSignals | Minimum number of bars between two divergence signals. Prevents signal clustering in volatile conditions. | 5 |
| minDistanceFromPreviousExtremum | Minimum number of bars between two swing points used in a divergence comparison. Ensures the divergence spans a meaningful price structure. | 2 |
| priceTolerancePct | Price tolerance percentage for determining whether a new extreme exceeds the previous one. A value of 0.1 means price must exceed the prior swing by at least 0.1% to qualify as a new extreme. | 0.1 |
The lookbackPeriod of 50 bars (default) is intentionally larger than the default for Delta Divergence (20) or CVD Divergence (20). This reflects the structural nature of Orderflows Divergence — it is designed to catch significant swing points, not minor fluctuations.
Visual Settings
| Parameter | Description | Default |
|---|
| showLines | Draw connecting lines between the two swing points that form the divergence. | true |
| lineThickness | Width of the divergence connecting lines in pixels. | 1 |
| symbolSize | Size of the divergence marker symbol in pixels. | 10 |
| bullishColor | Color for bullish divergence markers and lines. | #22c55e |
| bearishColor | Color for bearish divergence markers and lines. | #ef4444 |
Alert Rules
| Event | Fires When |
|---|
| new_divergence | A new multi-factor divergence is confirmed. The alert includes the direction, the price level of both swing points, and the bar timestamp. |
Comparison with Other Divergence Indicators
Cluster Terminal includes three divergence indicators. Each serves a different purpose:
| Aspect | Delta Divergence | CVD Divergence | Orderflows Divergence |
|---|
| Input | Single candle delta vs. price | Cumulative delta vs. price | Multiple order flow factors vs. price |
| Scope | One bar | Multi-bar trend | Multi-bar structure |
| Signal frequency | High | Medium | Low |
| False positive rate | Higher | Medium | Lower |
| Best for | Tactical entry timing | Trend exhaustion | Structural turning points |
| Confirmation delay | Minimal | Moderate (fractal) | Moderate (extremum + multi-factor) |
When to Use Which
- Scalping: Delta Divergence for quick entry signals at known levels.
- Intraday swing: CVD Divergence for identifying when intraday trends are losing steam.
- Swing / position: Orderflows Divergence for high-conviction structural reversals.
All three can be enabled simultaneously. When they all agree at the same price level, the confluence is exceptionally strong.
Practical Usage
Best Timeframes
| Timeframe | Suitability | Notes |
|---|
| 1m - 5m | Moderate | Signals are rare due to multi-factor requirements. Use for confirmation only. |
| 15m - 1h | Excellent | Ideal for intraday swing setups. Enough data for meaningful factor analysis. |
| 4h - 1d | Excellent | Strong structural signals for multi-day position entries. |
Confluence Setups
Orderflows Divergence produces the most reliable signals when it aligns with:
- Established support/resistance: Divergence at a level that has been tested multiple times adds order flow evidence to a proven price level.
- Volume Profile POC / Value Area: Divergence at the Point of Control or the boundary of the Value Area suggests that the market’s fair value assessment is shifting.
- Absorption Alpha: When multi-factor divergence coincides with visible absorption at the swing point, institutional activity is confirmed from two independent angles.
- Session levels: Divergence at the previous session high, low, or close carries additional weight because these levels are widely watched by market participants.
Parameter Tuning
- Conservative (fewer signals, higher quality): Increase
lookbackPeriod to 80, localExtremumPeriod to 5, and minDistanceBetweenSignals to 10. This configuration only fires at major structural turning points.
- Moderate (balanced): Use defaults. Suitable for most intraday swing trading scenarios.
- Aggressive (more signals): Reduce
lookbackPeriod to 30, localExtremumPeriod to 2, and minDistanceBetweenSignals to 3. Produces more signals but with a higher noise ratio.
Orderflows Divergence is stronger than single-metric divergences because it requires agreement across multiple order flow dimensions. However, this also means it fires less often. Use it as a structural filter: when it signals, pay close attention. When it does not, rely on other indicators for tactical entries.