![]() Hidden bearish divergence occurs when the oscillator continues to make lower lows, but the price action does not, and instead begins to consolidate.Īs mentioned previously, hidden divergence can be used as a continuation. ![]() The discrepancy between price action and the momentum indicator indicates that the momentum in the current price trend is slowing and we could see a fall in price about to occur soon. ![]() What Is Bearish Divergence?īearish divergence is when the price of an asset reaches higher highs, but the momentum indicator or oscillator shows lower highs. It usually occurs during price consolidation or corrections and can be used as a continuation pattern or signal. Hidden divergence occurs when an oscillator or momentum indicator makes a higher high or lower low, but the price does not. The main difference between Hidden Divergence and Regular Divergence is that Hidden Divergence is a sign of trend continuation, whereas Regular Divergence is a sign of trend reversal. To complicate matters even further, you can also have ‘mild' divergence, where a disparity exists but it is not as strong. So, all in all, here are four possible types of divergence: Within these types, there an additional two subsets: ![]() Practice This Strategy Types of Divergence ![]()
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May 2023
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