Hidden Bullish & Silver Hidden Bearish Divergence Silver Trading

Hidden divergence pattern is used as a possible sign for a trend continuation after the price has retraced. It is a signal that the original trend is resuming. This is the best set up to trade because it is in the same direction as that one of the continuing market trend.

Silver Hidden Bullish Divergence

This setup happens when price is forming a higher low ( HL ), but the oscillator (indicator) is displaying a lower low ( LL ). To remember them easily think of them as W-shapes on Chart patterns. It forms when there is a price retracement in an up-wardupwards trend.

The example explained and shown below shows an image of this silver formation, from the screenshot the price made a higher low ( HL ) but the indicator made a lower low ( LL ), this portrays that there was a diverging trade signal between the price and indicator. This signal displays that soon the trading market up trend is going to resume. In other words it displays this was just a retracement in an upward trend.

This confirms that a market retracement move is complete & indicates underlying strength of an upward trend.

XAGUSD Hidden Bearish Divergence Setup

This setup happens when price is forming a lower high (LH), but the oscillator is showing a higher high (HH). To remember them easily think of them as M-shapes on Chart patterns. It forms when there is a retracement in a downward trend.

The example explained and shown below shows an image of this silver formation, from the screenshot the price made lower high (LH) but the indicator made a higher high (HH), this portrays that there was a divergence pattern between the price and indicator. This portrays that soon the trading market down trend is going to resume. In other words it displays this was just a retracement in a downwards trend.

This confirms that a market retracement move is complete & indicates underlying momentum of a downward trend.

Other popular indicators used are Commodities Channel Index indicator (CCI), Stochastic Indicator, RSI and MACD. MACD & RSI are the best indicators.

NB: Hidden divergence setup is the best type divergence setup to trade because it gives a signal that's in the same direction with the current trend, thus the setup has a high reward to risk ratio. It provides for best possible entry.

However, a trader should combine this trading setup with another indicator like the stochastic oscillator or moving average and buy when silver is oversold, and sell when silver is overbought.

Combining Hidden Divergence Setup with Moving Average Crossover Method

A good indicator to combine these trading setups is the moving average indicator using the moving average cross-over method. This will create a good strategy.

Moving Average Crossover Method

In this method, once the signal is given, a trader will then wait for the MA cross-over technique to give a buy/sell trading signal in same direction, if there's a bullish divergence setup between the price and indicator, wait for the MA crossover system to give an upwards cross over signal, while for a bearish diverging setup wait for the MA crossover strategy to give a downward bearish crossover signal.

By combining this trading signal with other indicators this way a trader will avoid whipsaws when it comes to trading this signal.

Combining with Silver Trading Fibo Retracement Levels

For this example we will use an upwards market trend. We shall use the MACD indicator.

Because the hidden divergence pattern is just a retracement in an up-wardupwards trend we can combine the signal with most popular retracement tool that is the Fib retracement areas. The example explained and shown below displays that when this trading setup formed on the chart, the price had just hit the 38.20% level. When price tested this level, this would have been a good level to set a buy order.

Combining with XAGUSD Trading Fibo Expansion Levels

In the trading example above once the buy trade was placed, a trader would then need to calculate where to set take profit for this trade. To do this a trader would need to use the Silver Trading Fibo Expansion Levels.

The Fibonacci expansion was drawn as shown & illustrated on the chart as shown and descrided below.

For this example there were three take profit areas:

Expansion Level 61.80% - 131 pips profit

Expansion Level 100.00% - 212 pips profit

Expansion Level 161.80% - 337 pips profit

From this strategy combined with Fibonacci would have provided a good strategy with a good amount of profit set using these take profit areas.