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MACD Hidden Bullish and Bearish Divergence

MACD Hidden divergence is used as a possible sign for a trend continuation.

 

This setup occurs when price retraces to retest a previous high or low.

1. Hidden Bullish Divergence

2. Hidden Bearish Divergence

 

Hidden Bullish Divergence

Forms when price is making a higher low (HL), but the MACD oscillator is showing a lower low (LL).

 

Hidden bullish divergence occurs when there is a retracement in an uptrend.

MACD Hidden Bullish Divergence

MACD bullish divergence


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

 

Hidden Bearish Divergence

Forms when price is making a lower high (LH), but the MACD oscillator is showing a higher high (HH).

 

Hidden bearish divergence occurs when there is a retracement in an uptrend.

MACD Hidden Bearish Divergence

MACD bearish divergence


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

 

NB: Hidden divergence is the best divergence to trade because it gives a signal that is in the same direction with the trend. It provides for the best possible entry and is more accurate than the classic type of diverging.