FSVZO — Volume Zone Oscillator

FSVZO — The Oscillator That Paints Divergences Directly on the Chart

FSVZO (Volume Zone Oscillator) is a volume-based oscillator with one key advantage over traditional oscillators: it paints divergence signals directly on the price candle as it forms, eliminating the need for manual divergence identification. Regular divergences signal reversals; hidden divergences signal trend continuations.

• Oscillates between overbought (+80) and oversold (-80) thresholds — both adjustable
• White Moving Average crosses the band boundaries to generate signals
• Red X's on candles: overbought signal (oscillator above +80) — watch for bearish reversal
• Green Arrows on candles: oversold signal (oscillator below -80) — watch for bullish reversal
• R painted on candle: Regular divergence — reversal signal
• H painted on candle: Hidden divergence — continuation signal
• Key advantage: divergences are painted ON the candle as it forms — no manual calculation required

Four Divergence Types — Reversal and Continuation Signals

FSVZO identifies four divergence types, each with a specific implication. Regular divergences signal reversals; hidden divergences signal continuations. The R and H labels painted directly on the chart candle remove the subjectivity of manual divergence identification and provide clear, objective entry signals when combined with TA levels.

• Regular Bullish Divergence (R): price makes a lower low; oscillator makes a higher low — reversal UP expected
• Regular Bearish Divergence (R): price makes a higher high; oscillator makes a lower high — reversal DOWN expected
• Hidden Bullish Divergence (H): price makes a higher low; oscillator makes a lower low — continuation UP
• Hidden Bearish Divergence (H): price makes a lower high; oscillator makes a higher high — continuation DOWN
• R at a TA DBS zone = regular bullish divergence confirms the reversal level — highest conviction long trigger
• H during an uptrend pullback = hidden bullish divergence confirms pullback is over — continuation long trigger
• Red/Green hues on the chart: potential profit-taking areas — do not add to position when hues are present

At a new price high on the chart, the FSVZO paints an 'R' label on the candle. At the same time you can see that while price made a higher high, the oscillator reading is a lower high than the prior peak. What has formed and what does it signal?

• Regular Bearish Divergence — price higher high with oscillator lower high signals momentum is fading even as price rises; the R label confirms a potential reversal downward is forming and longs should be cautious or begin taking profit
• Hidden Bearish Divergence — price higher high with oscillator lower high is a hidden divergence signaling the downtrend will continue; the H label would appear instead of R if this were a reversal signal
• Regular Bullish Divergence — any divergence at a price high is bullish because it shows the oscillator is leading price and price will continue to rise to match the oscillator's reading

Answer it (with a live chart) in the interactive lesson.