Trade Forex Trading

Learn Forex Trading

Hidden Bullish and Hidden Bearish Divergence Trading

Hidden divergence is used as a possible sign for a trend continuation after the price has retraced. It is a signal that the original Forex trend is resuming. This is the best setup to trade because it is in the same direction as that of the continuing market trend.

 

Hidden Bullish Divergence

This setup happens when price is making a higher low (HL), but the oscillator (indicator) is showing a lower low (LL). To remember them easily think of them as W-shapes on Chart patterns. It occurs when there is a retracement in an upward Forex trend.

 

The example below shows an image of this setup, from the screenshot the price made a higher low (HL) but the indicator made a lower low (LL), this shows that there was a diverging signal between the price and indicator. This signal shows that soon the market uptrend is going to resume. In other words it shows this was just a retracement in an uptrend.

Hidden Bullish Divergence Example in Forex Trading



This confirms that a retracement move is complete and indicates underlying strength of an uptrend.

 

Hidden Bearish Divergence

This setup happens when price is making a lower high (LH), but the oscillator is showing a higher high (HH). To remember them easily think of them as M-shapes on Chart patterns. It occurs when there is a retracement in a downward Forex trend.

 

The example below shows an image of this setup, from the screenshot the price made a lower high (LH) but the indicator made a higher high (HH), this shows that there was a divergence between the price and the indicator. This shows that soon the market downtrend is going to resume. In other words it shows this was just a retracement in a downward trend.

Hidden Bearish Divergence Example in Forex Trading

 


This confirms that a retracement move is complete and indicates underlying strength of a downtrend.

 

Other popular indicators used are CCI indicator (Commodity Channel Index), Stochastic Oscillator, RSI and MACD. MACD and RSI are the best indicators.

 

NB: Hidden divergence is the best type to trade because it gives a signal that is in the same direction with the current market trend, thus it has a high reward to risk ratio. It provides for the best possible entry.

 

However, a trader should combine this setup with another indicator like the stochastic oscillator or moving average and buy when the currency is oversold, and sell when the currency is overbought.

 

Regulated Forex Broker

Takes 4 to 6 weeks to open an account, open early: Read The Article "Account Opening Procedure"

Choose the Best Forex Broker: Read The Article "Best Forex Broker"

Up To $6.67 Dollars Bonus for Every Lot Traded Get Up To $6.67 For Every Lot Traded

 

Combining Hidden Divergence with Moving Average Crossover Method

A good indicator to combine these setups is the moving average indicator using the moving average crossover method. This will create a good trading strategy.

Moving Average Crossover Method

Moving Average Crossover Method


In this strategy, once the signal is given, a trader will then wait for the moving average crossover method to give a buy/sell signal in the same direction, if there is a bullish divergence setup between the price and indicator, wait for the moving average crossover system to give an upward crossover signal, while for a bearish diverging setup wait for the moving average crossover system to give a downward bearish crossover signal.

 

By combining this signal with other indicators this way one will avoid whipsaws when it comes to trading this signal.

 

Combining with Fibonacci Retracement Levels

For this example we shall use an upward market trend. The currency pair is GBPUSD. We shall use the MACD indicator.

 

Because the hidden divergence is just a retracement in an upward trend we can combine this signal with the most popular retracement tool that is the Fibonacci retracement levels. The example below shows that when this setup appeared on the chart, the price had just hit the 38.2% level. When price tested this level, this would have been a good level to place a buy order on the GBPUSD currency.

Hidden Bullish Divergence on Upward Forex Trend Combined With Fibonacci Retracement Levels

 

 

Combining with Fibonacci Expansion Levels

In the example above once the buy trade was placed, a currency trader would then need to calculate where to take profit for this trade. To do this one would need to use the Fibonacci Expansion Levels.

 

The Fibonacci expansion was drawn as shown on the chart as shown below.

Fibonacci Expansion Levels Combined with Hidden Bullish Divergence

 

 

For this example there were three take profit levels:

Expansion Level 61.8% - 131 pips profit

Expansion Level 100.0% - 212 pips profit

Expansion Level 161.8% - 337 pips profit


From this strategy combined with Fibonacci would have provided a good strategy with a good amount of profit set using these take profit levels.

Up To $6.67 Dollars Bonus for Every Lot Traded Get Up To $6.67 For Every Lot Traded

Market Outlook: Very Bullish for EURUSD, and EURJPY - Also for GBPUSD, GBPJPY, and AUDUSD (No Need For Technical Analysis - This is Risk Appetite -Risk Averse Speculation).

Do Not Be Left by This Opportunity: Open an account and start buying Euros and position yourself early - Risk appetite speculation has already started. - Others are already profiting - Read the article How to Fast Track Account Opening and Open an account now.

Strategy: Buy the retracements and use 1 Hour and M15 Charts to look for best entry and exit points - Also checkout Money Management Rules.

Poland FX Seminar Gala

XM Account Holders Attend Poland FX Seminar

Malaysia Seminar

XM Account Holders Phillipines Seminar

XM Account Holders Thailand Seminar

Malaysia Forex Seminar

Hungary Forex Seminar

Greece Forex Seminar

XM Account Holders Hungary Seminar

XM Account Holders Thailand Seminar

European Forex Broker XM is Licensed and Regulated in 12 Countries; 10 European Countries, Australia and UK

XM Forex Broker Regulation Licenses

Should you open an XM Account this is exactly how it looks like:

Forex Account Secure Clients' Area - Trader Cabinet

Up To $6.67 Dollars Bonus for Every Lot Traded

Loyalty Bonus Points - Up To $6.67 Dollars Bonus For Every Lot Traded

Bonus Points

Forex Trading Accounts Members Area - Withdraw and Deposit Options

Real Forex Trading Account Withdraw and Deposit Options

XMP Forex Loyalty Bonus Program

Silver and Gold Online Trading

CFDs Trading and Forex Trading

50% and 20% Bonus

$5,000 Forex Bonus

Bonus Points

Forex Account Types

Micro Account - To open Micro Forex account, $100 minimum balance, 1.7 pips spread on majors, Leverage 1:500

For this account you can trade Micro lots as well as Nano lots and Pico lots. Traders looking for micro Forex brokers or micro lot Forex brokers can open this account.

Mini Account - To open Mini Forex account, $1,000 minimum balance, 1.7 pips spread on majors, Leverage 1:200. Traders looking for mini Forex brokers or mini lot Forex brokers can open this account

Standard Account - To open Standard Forex account, $10,000 minimum balance, 1.7 pips spread on majors, Leverage 1:100

As a note, you can also trade mini lots on the standard account, just select 0.1 Lots instead of the full lot - 1 lot.

Executive Account - To open Executive Forex account, $100,000 minimum balance, 1.7 pips spread on majors, Leverage 1:100

As a note, you can also trade mini lots on the executive account, just select 0.1 Lots instead of the full lot - 1 lot.

XM Zero Account - This account provides spreads as low as 0.1 for traders looking for a low spread Forex broker. (For this account there is an additional commission of $10 per lot on top of the spreads). This account is suited for high frequency traders such as scalpers and EA traders looking to save on the spreads. This is the account for high frequency EA automated trading strategies and traders who look for less than 1 pip forex broker. However, note there is the additional $10 fee commission per lot.


Islamic Forex Accounts

Islamic accounts are swap free, meaning there is no paying/receiving of interest. This account is suited for traders looking for Islamic Forex brokers.

Deposit/Withdraw Funds

Clients have a secure members area on their website once they have opened an account, in this client area or cabinet you can deposit/withdraw your money at any time. By clicking my account and then clicking deposit button then fill the details, for withdraw just click my account and then the withdraw button. Withdraw Requests are also processed on the same business day and receipt of funds is issued within the same day making XM the most reliable Forex broker online.

Regulated Broker