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Learn in detail about the best divergence indicator on TradingView, HiddenDivergence™️, which conveniently displays down the bottom of every chart you view. It's designed to be used on the daily timeframe and can be used on just about any asset in the world and is especially good on stocks. It uses a proprietary blend of data to accurately show divergences in price action that other more traditional indicators can't detect.
As a trader, one of the key skills to master is the ability to identify trend reversals and predict future price movements. One tool that many traders use to achieve this is divergence indicators, which help to identify discrepancies between price movements and technical indicators. While there are several freely available divergence indicators available on TradingView, one that stands out as particularly effective is Hidden Divergence.
In this blog post, we'll take a closer look at hidden divergence, explore how it works, and explain why it is the best divergence indicator for TradingView. Whether you're new to trading or a seasoned pro, understanding hidden divergence can help you make more informed trading decisions and improve your overall success in the markets.
How does the Hidden Divergence indicator work?
Hidden divergence is a powerful tool that can help traders to identify potential trend reversals before they occur. While traditional divergence indicators like the RSI are based on price movements alone, hidden divergence takes a more comprehensive approach by considering a blend of price, volume, and other technical studies. This makes it a more accurate and reliable indicator of market sentiment, helping traders to stay ahead of the curve and make smarter trading decisions.
The Hidden Divergence indicator typically oscillates between -10 and +10, with positive readings indicating bullish sentiment and negative readings indicating bearish sentiment. This means that when the indicator moves from positive to negative, it can be a bearish signal, indicating that the asset may be poised for a price drop. Conversely, when the indicator moves from negative to positive, it can be a bullish signal, indicating that the asset may be ready to rise in price.
One of the key benefits of the Hidden Divergence indicator is its ability to identify hidden divergences, which are discrepancies between price movements and technical indicators that are not immediately apparent. By detecting these hidden divergences, traders can get a more accurate picture of market sentiment and make more informed trading decisions.
The Hidden Divergence indicator is a powerful tool that can help traders to stay ahead of the curve and make smarter trading decisions. Whether you're a beginner or an experienced trader, understanding how this indicator works can help you to achieve greater success in the markets.
Here's an example of what Hidden Divergence looks like on a Disney Chart, we've highlighted on the chart using white lines to show the difference between the direction of the stock price and the direction of the Hidden Divergence indicator shown as the yellow area at the bottom of the chart.
You can use this indicator to find potential tops and bottoms in stocks and other markets, and then you want to trade in the direction that the divergence is pointing. When combined with other indicators and candlestick patterns, it can give powerful trading signals with a higher degree of success.
Divergence Trading and How Traditional Divergence Indicators like RSI and MACD are Used
Divergence trading has been a popular strategy among traders for many years. The basic idea behind divergence trading is to identify discrepancies between price movements and technical indicators, which can help traders to predict future price movements and identify potential trend reversals.
Two of the most commonly used indicators for divergence trading are the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD). These indicators work by comparing current price levels to previous price levels, and identifying divergences between the two. For example, if an asset is trending upwards but the RSI or MACD is trending downwards, this may indicate that the asset is overbought and due for a price correction.
There are several other indicators that traders can use to measure divergences, including the Stochastic Oscillator, the Commodity Channel Index (CCI), the Ultimate Oscillator, the Williams %R, and the Rate of Change (ROC) indicator. Each of these indicators works slightly differently, but they all aim to identify discrepancies between price movements and technical indicators, which can help traders to predict future price movements and identify potential trend reversals. Traders may choose to use one or several of these indicators, depending on their individual trading strategies and preferences.
While these traditional indicators can be useful for identifying divergences, they are not without their limitations. One of the main challenges with using these indicators is that they are based solely on price movements, which can make them less accurate in volatile or unpredictable markets.
This is where the Hidden Divergence indicator comes in. Unlike traditional indicators like the RSI and MACD, the Hidden Divergence indicator takes a more comprehensive approach by considering a blend of price, volume, and other technical studies. This makes it a more accurate and reliable indicator of market sentiment, which can help traders to make more informed trading decisions.
In addition to its more comprehensive approach, the Hidden Divergence indicator is also better suited to identifying hidden divergences, which are discrepancies between price movements and technical indicators that are not immediately apparent. By detecting these hidden divergences, the Hidden Divergence indicator can provide traders with a more accurate picture of market sentiment, which can help them to stay ahead of the curve and make smarter trading decisions.
Overall, while traditional indicators like the RSI and MACD can be useful for identifying divergences, the Hidden Divergence indicator offers a more comprehensive and accurate approach to divergence trading. By incorporating a range of technical studies and identifying hidden divergences, the Hidden Divergence indicator is a powerful tool that can help traders to stay ahead of the curve and make more informed trading decisions.
Examples of Hidden Divergence Indicator
Below are some examples of how this indicator shows divergences on different assets for your reference. We've highlighted the divergences on the chart with white lines, and ideally you want to trade in the direction of the divergence (the yellow area below the price chart).
Chipotle Mexican Grill ($CMG)
Utilities ETF ($XLU)
Bank of America ($BAC)
Consumer Discretionary ETF ($XLY)
How to Setup Real Time Trading Alerts
You can conveniently receive real-time trading alerts using TradingView whenever the Hidden Divergence indicator generates a buy, sell, or exit signal, thereby eliminating the need to monitor the charts all day long.
To set up alerts in TradingView for the Hidden Divergence indicator, follow these simple steps:
Log in to your TradingView account and navigate to the chart you wish to set up alerts for.
Add the Hidden Divergence indicator to the chart by clicking on the "Indicators" button at the top of the chart, searching for "Hidden Divergence", and selecting it from the list of available indicators.
After adding the Hidden Divergence indicator to the chart, click on the "Alerts" button located at the top of the chart.
Click on "Create Alert" and choose "Hidden Divergence" as the condition.
Select the asset and desired timeframe for which you want to receive alerts.
Choose the type of alert you prefer to receive (such as email, popup, SMS) and provide the necessary details.
Set the trigger conditions for the alert, such as "Crosses above" for the upper red line or "Crosses below" for the lower green line.
Click "Create" to save your alert.
Once you have set up your alert, you will receive notifications whenever the Hidden Divergence indicator issues a trading signal based on the conditions you specified.
This feature can help you keep a close eye on your trades and take prompt action when required.
How to Get Access to Hidden Divergence™️
Looking to simplify your trading strategy and increase your chances of winning trades? Look no further than Hidden Divergence, an exclusive trading indicator available for purchase in our store.
With its proprietary blend of price, volume, and other technical studies, Hidden Divergence is a powerful tool for measuring divergences and predicting trend reversals. And with its user-friendly setup process, you can start using it in your TradingView account in just a few minutes.
Head over to our store and make your purchase today to start trading with greater confidence and success.
Visit our indicator store page and get access to the Hidden Divergence indicator today!