Beautiful USDJPY hidden divergence setup this morning on the 15-minute chart. This trade setup was going into the higher timeframe magenta peaks, which have came in strong overnight. The peaks started on the GBPJPY and culminated with the magenta peak on the USDJPY.
USDJPY Hidden Divergence Setup
This morning the Multicharts Scanner said it all — an abundance of volume divergences and magenta peaks (MPks). Notice there are already MPks on the EURJPY and GBPJPY on the daily chart with short volume divergence and the ADX is over 70 on the USDJPY.
Going down to the 15-minute chart, price retraced back to the ATR and hidden divergence setup formed on the highs. Additionally, the Directional Volume indicator shows that sellers sold the high.
Using an OTM binary option, there was $30 of risk per contract for the 9am expiration at the 112.92 strike. The binary expired in the money for a profit of $70 per contract. This is the benefit of using the hidden divergence in combination with the other indicators to identify where price will likely go. Then by using an OTM to limit risk, traders can increase there profit potential.
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