GBPUSD 1 Hour: Hidden Divergence Example

FX:GBPUSD   British Pound/U.S. Dollar
We don't talk about this too much in outside of the 12WT because many traders have a hard enough time wrapping their heads around regular divergence, but here's a crystal clear example of the "Hidden Divergence" that some of you have heard me mention before.

Akil Stokes
Chief Currency Analyst & Trading Coach
Trade active: Just got long this in the Live Room
Trade closed: target reached: Light'em Up!
Hi Akil,

The RSI is almost oversold. But when i check this on a ninjatrader chart it says its at 44.30 is that also on your NT chart?

+1 Reply
spyro85 Jimz0r
Maybe check your RSI settings are the same on Ninjatrader? Akil usually uses a setting of 7 whereas on some platforms the default is 14 :)
+1 Reply
Jimz0r spyro85
That did it! thank you Spyro!
spyro85 Jimz0r
Pleasure. Happy trading :)
Thanks for posting this. Is hidden divergence an indicator of a drop or fall? Thanks a lot
+1 Reply
Hidden divergence would be used in continuation opportunities
Monaoeda Akil_Stokes
Thanks a lot, appreciate the insight
61.8 retracement also for the small two swings, loving this trade confluence
Thank you Akil, you rock.

Depending on your trading plan divergence will probably be just one factor that builds up to an entry reason for a trade, but the table below might help speed up spotting divergence opportunities.

--Type-- --Price-- --Oscillator-- --Trade--
Regular Higher-High Lower-High Sell
Regular Lower-Low Higher-Low Buy
Hidden Higher-Low Lower-Low Buy
Hidden Lower-High Higher-High Sell
Nice Akil! Learned the technique from you. Implemented it into my trading plan as contraindicator for clearly defined setups. Thank you! Here my last update on $EURUSD
One more time? 2nd Chance to short at prev. structure! EURUSD
awesome Akil!
Ok, that was fun :)
Hello Akil my friend , very nice Hidden divergence there also called Positive Divergence , we know each other from way back and as you know i prefer to use RSI on a setting of 14 .
+1 Reply
Hey John! Great to see you here on tradingview
A bit more explanation is needed when trading with divergences. Simply going long on hidden bullish or short on hidden bearish doesn't work. Look at the comments in the chart below. Divergences are nothing but corrections. Corrections are nothing but prices bouncing off Support/Resistance. Divergences fail just a support/resistance fail and this is something traders should bear in mind. What's good about this set up is the perfect confluence of a regular and a hidden divergence, which offers a lot higher probability than regular set ups.
+1 Reply
johnmad PRO justatrader
Hidden Divergence , Bearish Divergence and Bullish Divergence is more noticeable on RSI with a setting of 14 and then to select T/H 3 , which smooths out the RSI , Refer to the Book written by John Hayden and go to page 65 and look at Chart 13 , my entire trading is based on RSI which to me is the most powerful tool in my tool box , if you want to go and break it down even further as my good friend Akil knows we used to study this Way back , you can trade simply by only watching RSI and NO PRICE , i have a trading system that works on this principal only , What Akil has shown there is 100% correct as RSI has converted from Bullish to Bearish and that is called Market Conversion , Harmonically you now have or should retrace back up above the 50 line within RSI and by doing that as soon as RSI Crosses the 30 line you Buy which the Hidden Divergence is shown on Akil's Chart .
+2 Reply
Congratulations! Your chart has been selected to be highlighted for the post of the day. This was a great trade setup highlighting entries based on indicator divergence.
+2 Reply
Akil_Stokes PRO walker.england
Thank you, that's a great honor!
+1 Reply
Great job!
Nice guru ;)
Ideas Scripts Chart
United States
United Kingdom
Home Stock Screener Forex Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Account and Billing Sign Out