I usually ignore hidden divergences when a trade setup is good. However, this an interesting exception. The previous swing high that forms the divergence is at a critical S/R level (Red Line). See, I do not draw my S/R lines the traditional way -by looking at price action alone-, I also take into account market volatility. Thus, when the hidden divergence is formed from this level, I'm gonna listen to it. It is my personal way of filtering an otherwise flimsy signal.
For this reason, I will wait for price to reach and break the red line before entering a position.
For this reason, I will wait for price to reach and break the red line before entering a position.
Commentaire:
... and that's why I usually ignore hidden divergences.