Trading Gold Using Hidden Divergence with ADX and ATRTrading Gold using hidden divergence, especially when combined with the TradersHelpDesk indicators, can be very profitable.

Trading Gold Using Hidden Divergence

On the Gold 12-minute chart below, just before the European opening session, hidden divergence using the Stochastics is shown.  Price has made a higher low, yet the Stochastics has made a lower low (identified with the yellow arrows).  In addition to the hidden divergence, the TradersHelpDesk indicators show:

In addition to using hidden divergence with the Stochastics, the TradersHelpDesk indicators also show:

  • Volume divergence on the lows identified with the TradersHelpDesk Directional volume indicator (small yellow line on the volume indicator shows the divergence).  In other words, as price retraced to the Pivot Line, sellers were losing interest.  A great indication that price would not break the pivot line (white line on chart with yellow arrow) as it formed an area of support.
  • TradersHelpDesk ADX forms a magenta peak which will send price back to the ATR plus sign (pink dot with yellow arrow).

Trading Gold Using Hidden Divergence

In other words, along with the using hidden divergence on the Stochastics, the TradersHelpDesk Directional Volume indicators shows sellers diverging and the TradersHelpDesk ADX shows price should at least retrace to the ATR (plus sign) and possibly more since the Pivot Line is supporting price.  Since the Pivot line is supporting price, a stop could be placed slightly below the Pivot line or the trader could use binary options (one strike out) on the daily binary to lower their risk even further.  Of course, experienced traders could do a combination of both types of trades (futures and binaries) to increase their profit potential on a great trade setup.