# Gradient Divergence Trading

Visual method using colored price bars to detect divergence between price action and momentum.

Canonical: https://prismaticalgos.com/compendium/algo/2115-gradient-divergence-trading
Record ID: 2115
Catalog rank: 2517 (reading order, not performance)
Snapshot: 2026-10-31 15:46 UTC
Family: Mean Reversion & Counter-Trend (B)
Source: https://nexusfi.com/a/strategies/gradient-divergence-trading
Evidence label (unverified): backtest_shown

## Scope and limitations

These are machine-extracted research records, not verified trading systems. Catalog rank measures specification detail and claimed evidence, not profitability. The catalog extraction pipeline did not independently backtest these records. Its separate selected testing ledger does not validate the wider corpus. Rules, labels and parameters can be incomplete or wrong; consult the original source and its reuse terms.

No endorsement, ownership claim or source-code reuse permission is implied.

## Extraction warnings

No automated warnings recorded; this is not validation.

## Recorded profile

- symbols: ES, NQ, CL
- timeframes: 5-minute, 1-minute
- sessions: RTH (Regular Trading Hours)
- market_regime: any

## Indicators

- Gradient Divergence: {}; applied to: close

## Recorded long-entry rules

- Not specified.

## Recorded short-entry rules

- Price reaches key level AND makes new extreme
- Bar at new extreme shows visibly weaker color than prior extreme (15+ Stochastic points weaker minimum)
- Stochastic %D crossover below %K has occurred or is occurring

## Recorded exit rules

- Scale out: 50% at T1, move stop to breakeven, let runner work
- Hold runner as long as bar color stays in

## Recorded filters

- news filter
- max spread 2.0 pips

## Risk controls

- Stop loss: 1-2 ticks above the swing high of the divergence bar
- Take profit: T1: Previous swing low or nearest volume node (Market Profile POC or HVN) — typically 8-16 ticks from entry on 5-minute ES
- Position sizing: N/A