Hidden divergence

USDCHF Daily/4HR.

Another setup that I just missed for a few pips before the end of the week.

An instrument to check at the start of next week.

Just to show an example of a HD setup that didn't work, because it happens. On the Daily chart, there is a clear HD pattern (bold black lines). As soon as the indicators are diverging from the movement of price (red vertical line), I switch to the next smaller TF to wait for an entry signal. In that case, there is a regular bearish divergence building up and I usually wait for MACD to cross down the zero line, which is indicated by the black arrows. It is better to chose the third down arrow for an entry because price crosses down the trendline (diagonal dotted line). Despite of all those convergence signs, price reversed and started to go up. But then there was a bullish HD pattern forming at the vertical green line. Switching to the 1HR TF, we see a bullish regular divergence and an entry point when MACD crosses up the zero line. So we would have recovered the loss in the 4HR TF by the gain in the 1HR TF. It is easy to tell afterwards, but I noticed a few times that when a HD pattern doesn't work, there can be opportunities for trading in the other direction right after.

Can someone check GBPNZD 4H/30min, could be a good setup. Correct me if I'm wrong Chamane

Yes, to me it is a valid HD setup on the 4 HR TF. Not a strong one because I prefer when more candles are involved in the divergence patterns, but a valid one nevertheless. Actually, the HD pattern on the 1HR TF is more clear to me. You could have entered when price crossed the trendline up on the 30 min TF, but I prefer to wait for the MACD signal. I don't trade that pair often because of the high spread (14 pips) I get from my broker, but I use it to confirm other pairs with correlation.

Hi Dany, first of all thanks a lot for sharing your system and putting so much effort in this thread which I have read enterely during the weekend.

I see that quite often you don't draw the trendline anymore and you don't wait to be broken to enter, like you used to do at the beginning. What criteria are you using to enter such at a early stage? Sometimes I see it's the rejection of a BBand, but what is the idea for example in this trade?

https://www.forexfactory.com/attachm...1&d=1548260394

Many thanks, Puma

looling for a sell entry

Fine, but beware, it is not a hidden divergence but a classical, you would be trading against a strong trend.
Best of luck anyway.

Keeping an eye on this pair.

HD long right?

I know this thread is about Hidden Divergence, being "safer" than normal Divergence, which is true.
But normal divergence can sometimes yield big time profits too.
Look at his chart, and the signal the Div. indi gave at the bottom, on 10 th. January. (green arrow and brown arrow)

Imagine you put an order to go long on the top of the signal bar, with a stop below.

...continuing.
So imagine you went long USDCHF 240, on that early morning, risking 15 pips.
There´s an old ,simple trailing technique: trail 3 bars/ inside bars don´t count.
Now look at the same USDCHF chart (from Dynamic Trader software), I marked all the 3 bars trailing stops (no inside bars), all the way till the end of the trade.
Result: 12,71 R

Btw: the fourth stop looks like it was taken, but it was not, cause it was placed, following the no inside bars rules AFTER the correction, which was all inside bars!

I don´t trade the Hour charts, but there´s a signal here....(at your own risk disclaimer!)..

I'm in on this one on the 4HR chart.

But I just shorted AUDCAD 240.

I would have waited for price to cross the trendline and MACD to cross the zero line, but let's wait and see.

Trapped in a triangle, bullish HD, have a pending order above last bar, if it breaks the triangle...

I use the Time Statistics ,using fibonacci and averages on price and time from the Dynamic Trader software.
The segment below (Time Rythm Zone), is a wide range time swing calculation.
The next segment (Time Bands), is based on the HH/LL average of the last swings .
The Verical purple bars are highest probaility Fibo calculations from the 15 swings before.

They all tend to be very usefull..sometime they hit the area spot on or within 1 or 2 bars.

Everything looks good for a swing change at this time, what I don´t like is the broad price average on the left!!PriceRythm Zone, which calls for a deepr correction.
The boxes I drew, would be the ideal area in price and time for a swing change.
It´s great when you get a confluence of those, and a HD signal...add a stop run, and BINGO.

EURGBP bearish.