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Hidden divergence

  • #2,241
  • Aug 30, 2019 2:33am Aug 30, 2019 2:33am
Quite a poor week although so much news going on so not surprising. Results :- GBPUSD +65
2 further trades still open but losing quite heavily CADJPY and USDCHF
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  • #2,242
  • Aug 30, 2019 6:27am Aug 30, 2019 6:27am
Quoting ken911
Quite a poor week although so much news going on so not surprising. Results :- GBPUSD +65 2 further trades still open but losing quite heavily CADJPY and USDCHF {image}
I agree. No trade for me this week for this strategy. Looking more Daily and Weekly charts.
  • #2,243
  • Aug 30, 2019 11:16am Aug 30, 2019 11:16am
I entered this one:
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And still holding that one:
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  • #2,244
  • Sep 3, 2019 7:00am Sep 3, 2019 7:00am
Buy order is cooking here, but the main trend is down...
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  • #2,245
  • Sep 4, 2019 11:00am Sep 4, 2019 11:00am
I have a question that I want to confirm which so far has confused me, which point should be the best place for entry, when hidden divergence is formed ...? I have tried several times to make an entry when the candle shows a rebound to the lowest / highest end of the hidden divergence, but when that happens sometimes I find the candle does not make it to or even penetrate the lowest / highest point where the hidden divergence point is formed, even I find there forming a new trend in other words the hidden divergence is ignored. Because as far as I know hidden divergence or fake regular divergence is a divergence that should make a sign that the trend will continue or there is no rebound / reversal.
  • #2,246
  • Sep 4, 2019 5:34pm Sep 4, 2019 5:34pm
Quoting newtraderer
I have a question that I want to confirm which so far has confused me, which point should be the best place for entry, when hidden divergence is formed ...? I have tried several times to make an entry when the candle shows a rebound to the lowest / highest end of the hidden divergence, but when that happens sometimes I find the candle does not make it to or even penetrate the lowest / highest point where the hidden divergence point is formed, even I find there forming a new trend in other words the hidden divergence is ignored. Because as far as...
Everybody has its own way for entering a trade. You can use price action combined with a trendline and the Fibonaci tool, or simply a signal from your preferred indicator. I suggest that you practice on a demo account, because backtesting with past data won't show you all the cases when a developing divergence disappeared after price continued in the wrong direction. Personally, whenever I see a hidden divergence developing, I switch to a smaller timeframe and use MACD crossing the zero line for entries.
  • #2,247
  • Sep 5, 2019 12:08pm Sep 5, 2019 12:08pm
Nice sir
"The market doesn't care about you, stop hoping it will." Dirk
  • #2,248
  • Sep 6, 2019 4:34pm Sep 6, 2019 4:34pm
I jumped on this opportunity this week. A hidden divergence pattern on the Weekly chart and a regular divergence on the Daily at the same time. I entered the trade aggressively after the cross of the trendline because I didn't wait for MACD to cross the zero line (Daily TF).
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  • #2,249
  • Sep 7, 2019 3:46am Sep 7, 2019 3:46am
can this pattern be confirmed as a divergence pattern ...? because before I was in a short position, I decided to sell because before the divergence pattern was formed. But the pattern that I have shown hasn't crossed the Ichimoku cloud from the previous divergence ...
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  • #2,250
  • Sep 7, 2019 8:07am Sep 7, 2019 8:07am
Quoting newtraderer
can this pattern be confirmed as a divergence pattern ...? because before I was in a short position, I decided to sell because before the divergence pattern was formed. But the pattern that I have shown hasn't crossed the Ichimoku cloud from the previous divergence ... {image}
newtraderer,

The way I see it, there was no divergence pattern to the downside (see red lines). The only pattern I see is a hidden divergence to the upside (see yellow lines). If you decide to buy, I would wait for price to cross the red line.
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  • #2,251
  • Sep 7, 2019 9:16am Sep 7, 2019 9:16am
Quoting chamane
I jumped on this opportunity this week. A hidden divergence pattern on the Weekly chart and a regular divergence on the Daily at the same time. I entered the trade aggressively after the cross of the trendline because I didn't wait for MACD to cross the zero line (Daily TF). {image}
Chamane , Dany and the rest.. Thanks for sharing!!!Learning lots from all of you..

Just a Veteran Newbie here, but I see your USCAD daily tf entry could be validated by a strong regular and hidden divergence indication on the monthly tf!

Attachment gAttachment gAttachment gAttachment gAttachment gAttachment g
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  • #2,252
  • Sep 7, 2019 12:14pm Sep 7, 2019 12:14pm
Quoting FxPhysics
{quote} Chamane , Dany and the rest.. Thanks for sharing!!!Learning lots from all of you.. Just a Veteran Newbie here, but I see your USCAD daily tf entry could be validated by a strong regular and hidden divergence indication on the monthly tf! 343342934334303433430343343134334353433435{image}
This is a very good observation. We should always look at the big picture.
  • #2,253
  • Sep 7, 2019 1:01pm Sep 7, 2019 1:01pm
Here are some opportunities that gave some pips this week on the 4 HR timeframe using the hidden divergence pattern.
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  • #2,254
  • Sep 8, 2019 7:43am Sep 8, 2019 7:43am
Quoting chamane
{quote} newtraderer, The way I see it, there was no divergence pattern to the downside (see red lines). The only pattern I see is a hidden divergence to the upside (see yellow lines). If you decide to buy, I would wait for price to cross the red line. {image}
does the tail of the candle still have to be measured too ...?
  • #2,255
  • Sep 8, 2019 7:54am Sep 8, 2019 7:54am
Is the divergence pattern like the following picture are correct ...?
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  • #2,256
  • Edited 9:31am Sep 8, 2019 8:14am | Edited 9:31am
Quoting newtraderer
Is the divergence pattern like the following picture are correct ...? {image} {image}
Yes

1st picture: Red Line is Bearish Classic Divergence
Green Line is Bullish Hidden Divergence

2nd Picture: Red Line is Bearish Hidden Divergence

Classic Div suggests reversals to current trend
Hidden Div suggests continuation of current trend
  • #2,257
  • Edited 10:19am Sep 8, 2019 9:01am | Edited 10:19am
Quoting newtraderer
can this pattern be confirmed as a divergence pattern ...? because before I was in a short position, I decided to sell because before the divergence pattern was formed. But the pattern that I have shown hasn't crossed the Ichimoku cloud from the previous divergence ... {image}

I will comment on the trade...

There is no right or wrong in trading. It is a very subjective business. However, there are ideal examples and there are "Relatively" good or bad examples. "Relative" is the key.

1- Now, The very small green (alternate trend line) on the very top of the chart is diverting from the indicator you have. You drew the line from the close not from the wick.
If you draw this same line from the wick, it will not be diverting.

Which brings a question: If we have a long wick that stands out? Should we consider it? Same question is being asked when drawing Fibonacci retracements, expansions and projections. Should we consider longer wicks (hammers for example). There is no common agreement as it is subjective and relative from one trader to another. A long wick on daily, weekly will change your retracements. Any way this is bit irrelevant.

2-The best divergence happens when you have "Distinct" and "Standing out" peaks and troughs in both price and the indicators.
However, some traders may use relatively small inputs in an indicator of their choice to find those very small divergences that do not stand out and are not ideally visible.
An example: a trader may use stochastics with inputs of 5,3 to get the "very now" divergence on a Higher time frame between two relatively much closer peaks/troughs and quickly zoom in to much lower time frames to find opportunities in lower time frames. I some times use MACD 5,13,1 for this purpose or stochastics, etc...

And definely, you have to check more than one time frame.

3-There is another question: Is their a divergence on a HTF that is conflicting with our divergence in the entry Time Frame? If there is one, and we still want to trade, how to know if the HTF Divergence is over or not?
The answers will vary and there is no definite concrete answer.
Some will say, wait for price on HTFs to hit three levels of Support or Resistance. Others would say, wait from MACD histogram (in case they use MACD) to start ticking in the second cycle.

You see, the absence of a concrete answer is the beauty of technical analysis. Avery small divergence on a monthly chart, may give you many pips on an H4 chart with a divergence in your favour.

Find books or watch you tube videos for Dr Elder Ray. He uses MACD Histogram slopes. One of his books I read (forgot the name but he was interviewing many traders and commented on their charts) commenting on Gerald Appel's (the one who brought MACD to life from PPO) trades. Geral Appel entered his trade based on MACD. Dr Elder Ray criticised it a bit based on the histogram. A very interesting read.

There are other books of course that covers the topic of divergence.



BTW: A trend line is either on the lows in a bullish market or on the highs of a bearish market. The other line is called alternate line.
  • #2,258
  • Edited 9:30am Sep 8, 2019 9:17am | Edited 9:30am
Quoting chamane
I jumped on this opportunity this week. A hidden divergence pattern on the Weekly chart and a regular divergence on the Daily at the same time. I entered the trade aggressively after the cross of the trendline because I didn't wait for MACD to cross the zero line (Daily TF). {image}
Hello chamane..

Has been a while since we had our last interesting discussion.

I envy your patience with daily/weekly charts.
  • #2,259
  • Sep 9, 2019 4:24am Sep 9, 2019 4:24am
Quoting mtharwat
{quote} Yes 1st picture: Red Line is Bearish Classic Divergence Green Line is Bullish Hidden Divergence 2nd Picture: Red Line is Bearish Hidden Divergence Classic Div suggests reversals to current trend Hidden Div suggests continuation of current trend
how to determine the exit point, I often miss the exit point that forces me to cut loss because it has experienced a reversal moment
  • #2,260
  • Sep 9, 2019 4:28am Sep 9, 2019 4:28am
anyone can help me, why do prices continue to rise ...? even though I didn't find regular / hidden divergence ...?
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