Hidden Divergence on the daily of GNUS
Updated
What is a hidden divergence?
"A hidden divergence occurs when an indicator makes a higher high or a lower low while the price action does not. This often indicates that there is still strength in the prevailing trend, and that the trend will continue. A hidden divergence is used in a similar way to a confirmation pattern."
How can traders use divergences?
"Traders can use divergences as a leading indicator, as it precedes the price action. A divergence comes about because a technical indicator does not agree with the current market price, which means that a change in direction is likely. So, traders can potentially use the divergence pattern to enter and exit trades.
However, it is important to note that the technique does not give a set price point at which to open or close a trade, just an indication of the strength or weakness of the underlying market sentiment."
"A hidden divergence occurs when an indicator makes a higher high or a lower low while the price action does not. This often indicates that there is still strength in the prevailing trend, and that the trend will continue. A hidden divergence is used in a similar way to a confirmation pattern."
How can traders use divergences?
"Traders can use divergences as a leading indicator, as it precedes the price action. A divergence comes about because a technical indicator does not agree with the current market price, which means that a change in direction is likely. So, traders can potentially use the divergence pattern to enter and exit trades.
However, it is important to note that the technique does not give a set price point at which to open or close a trade, just an indication of the strength or weakness of the underlying market sentiment."
Note
There's also a bit of bullish divergence as well.[B]What is a bullish divergences?[/B]
A bullish divergence is a pattern that occurs when the price falls to lower lows, while the technical indicator reaches higher lows. This would be seen as a sign that market momentum is strengthening, and that the price could soon start to move upward to catch up with the indicator. After a bullish divergence pattern, it is common to see a rapid price increase.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.