Hidden Divergence

Hidden divergence is a continuation signal that suggests the prevailing trend is likely to resume after a temporary pullback. Bullish hidden divergence occurs when the price makes a higher low, but the indicator makes a lower low during an uptrend.

Bearish hidden divergence occurs when the price makes a lower high, but the indicator makes a higher high during a downtrend. Unlike regular divergence, which signals a reversal, hidden divergence signals that the current trend has underlying strength.

It is a powerful tool for traders to identify optimal entry points to join a trend that is already in progress. It helps in distinguishing between a trend reversal and a simple correction.

By focusing on hidden divergence, traders can stay aligned with the primary market direction. It is a more advanced technical analysis concept that requires careful observation of both price and momentum.

Using this signal allows for better trend following and increased confidence in trade setups.