Assalamualaikum
The best and safe way to open the trade position is along with the trend. But many traders including me prefer to trade against the trend and hope for a trend reversal or retracement. I don't know why I am doing this. But actually if we stick to a system with tight stop and discipline, I am sure we will success on trading. The keyword is tight stop.
Divergence or hidden divergence must be confirmed with other conditions such as trendline break or candlestick patter. If both are exist then a good trade opportunity is on the way. On this example I will show a trade setup on M5 EURJPY pair. It based on hidden divergence and trendline breakout.
The price above is trending up and then retrace. On the retracement process the indicator falls away below the zero line. Then if we compare the indicator with the previous low it shows a hidden divergence.
We open Long/Buy position on the trendline breakout. Practice our self to spot this kind of trade setup with discipline stop loss and I am sure profit will go with us soon.
Wassalamualakum
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