The Flow of fund(FOF) divergence signal indicator consists of the following parts: The Flow of fund histogram, FOF trend line and divergence signal. The signal is instantly drawn on current bar and will not repaint.
HISTOGRAM shows an approximate amount of money get in or out of the market within 1 bar. If selling pressure is stronger than buying pressure, it will be a red histogram, otherwise, it will be a green histogram.
Flow of fund trend line indicates the short or long term movement of the flow, determined by the "Length of FOF" input you set.
In order to keep it simple, there are only two inputs.
The divergence signal has two types, bearish and bullish.
A bullish divergence occurs when the price hit a lower low and the FOF line is in uptrend. A down arrow will be drawn above the current FOF line when there is a bearish divergence between FOF and price trend.
A bearish divergence occurs when the price hit a higher high and the FOF line is in downtrend. A up arrow will be drawn below price candle bar when there is a bullish divergence between FOF and price trend.
To add alerts for both bearish and bullish signals, please follow the pics below.
The following images show how it works on different chart types and timeframes.
It works on Heikin Ashi.
It works on Renko
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