Divergence Strategy Tutorials Tutorial

Combining Indices Hidden Divergence with MA Crossover Strategy and with Fibonacci Retracement Areas

Hidden divergence is used as trend continuation signal after the price has retraced. hidden divergence is a signal that the original market trend is resuming. Hidden divergence the best divergence stock indices setup to trade because it gives a trading signal that is in same direction as that of the continuing trend.

Divergence Strategy Tutorials Tutorial

Indices Hidden Bullish Divergence Indices - Hidden Bullish Divergence Strategy Tutorials PDF

This indices hidden bullish divergence setup confirms that a price retracement move is complete & signals underlying strength of a upward trend.

Divergence Strategy Tutorials Tutorial

Indices Hidden Bearish Divergence Indices - Hidden Bearish Divergence Strategy Tutorials PDF

Hidden bearish divergence confirms that a price retracement move is complete & signals underlying strength of a downwards trend.

Hidden divergence is the best type of stock trade divergence setup to trade because it gives a signal that is in same direction as that of the current market trend -trend following strategies, thus it has a high risk to reward ratio. Hidden divergence stock indices setup provides for the best possible entry and exit for stock trades.

However, a trader should combine hidden divergence signal with other indicators to confirm these stock trade signals.

Combining Indices Hidden Divergence with MA Crossover Strategy

A good indicator to combine hidden divergence indices setup is the moving average indicator using MA cross-over trading strategy method. This will create a good divergence strategy.

Combining Hidden Divergence with Moving Average Cross Over Indices Strategy Method

In this divergence trading strategy, once the signal is given, a trader will then wait for the moving average cross over strategy to give a buy signal or sell signal in the same direction as that given by the divergence indices setup, if there is a bullish divergence trading setup between the price and indicator, wait for the MA cross-over stock system to give an upward cross over signal, while for a bearish divergence trading pattern wait for the MA crossover trading system to give a downward bearish crossover trade signal.

By combining this divergence signal with other indicators this way a trader will avoid whipsaws when it comes to indices trading this hidden divergence trade signal.

Combining Hidden Divergence with Fibonacci Retracement Levels

For this divergence trading example we shall use an upwards trend. We shall use the MACD indicator.

Because the hidden divergence trading setup is just a retracement in an upward trend we can combine the hidden divergence signal with the most popular retracement tool that is the Fibonacci retracement zones. Examples explained below portrays that when this hidden divergence indices setup appeared on the chart, the price had just hit the 38.2% Fibonacci retracement level. When price tested this retracement level, this would have been a good level to place a buy order on the trading chart.

Combining Indices Hidden Divergence with Fibonacci Retracement Levels

In the divergence example shown above once the buy trade was placed, a trader would then need to calculate where to take profit for this trade. To do this a trader would need to use the Stock Indices Fib Expansion Levels.

The Fib expansion levels indicator was drawn as displayed on the trading chart as is shown below.

Combining Hidden Divergence with Fibonacci Retracement Levels Indices Trading

For this trading examples there were 3 take profit areas:

Fibonacci Expansion Level 61.80%

Fibo Expansion Level 100.0%

Fibonacci Expansion Level 161.80%

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