Trading hidden divergence after a trend divergence is easy with the THD Stochastic Div indicator. The trader can trade either the spot forex market or binary options.
Trading Hidden Divergence after Trend Divergence Using Forex Market or Binary Options
The 15-minute charts below for the EURJPY and GBPJPY show the setups. The Stochastics Div indicator plots either a green dot or magenta dot when the trend divergence is detected. The trader has the choice to trade the actual trend divergence move using OTM binary options or wait for the test at the Average True Range stop that is built-in to the Trend ATR indicator. If trading hidden divergence, the trader simply waits for price to approach the ATR and look to see if hidden divergence is formed.
The technique also works on futures and commodities as the charts below show.
Of course, if hidden divergence does not appear, probabilities are that price will not test the previous high or low.
Both the trend divergence and hidden divergence techniques are considered to be leading indicators and allow traders to skew their risk to reward in their favor. This means the trader can lower their risk but increase their reward if trading the forex market, futures, commodities and/or binary options.
The TradersHelpDesk Stochastic Divergence is currently only available for TradeStation and Multicharts. The TradersHelpDesk Trend ATR and Stochastics is available for TradeStation, Multicharts and NinjaTrader 8.