Hello traders, here I want to show you how this Hidden divergence works using MACD indicator. As you know, MACD is a late and slow indicator but if it combined using hidden divergence strategy, this indicator can be very powerful. Here is the example of MACD hidden divergence on CADJPY pair H1 timeframe.
As you see above, CADJPY H1 time frame has retest the previous high but cannot break it. As this happened, the MACD has travelling upward a lot and create a clear hidden divergence.
This condition is good for SELL position. As you see the price move down pretty nicely after the hidden divergence occur.