let me start from normal divergance: Divergance means we have different trend between price and an indicator.
1-Normal Positive Divergance :
we have a bullish pattern in prices, which means the new high is more than previous high ... in this situation if we have divergence only negative one could be there, cause price trend is already bullish and diverge to that is bearish but when we have negative divergence (only meaning for bullish price pattern) when the indicators can?t have a new high more than previous one , or we could say the current bullish pattern doesn?t have enough strength and stamina so , for price will be very difficult to have a new high more than previous which means bearish ...look below picture
2-Normal negative Divergence: we have a bearish pattern in price, which means the new low is lower than previous one, again if we have a divergence here it could only be bullish or positive one cause price pattern has already a bearish pattern but when we have a positive divergence (only meaningful for a bearish price pattern): when new indicator's low is not lower than the previous low (unlike price), so we could say the bearish price pattern doesn?t have enough negative inertia and we could see end of bearish pattern: look below picture
But what is hidden divergence which is now normal between Technical Analysis and we could see them almost as the same rate that we see normal divergence:
Again we should have divergence between price and indicators: But unlike the normal one here we first consider the indicator pattern then price patterns:
3- Hidden Positive divergence: because it is a positive divergence we should have a bearish pattern in indicators : which means indicator's new low is lower than previous one (bearish pattern) but price has a new low not lower than previous one and here we could say price is not following the bearish pattern which would have a positive or bullish perception : look below pic
4- Hidden negative divergence: because it is a negative divergence we should have a bullish pattern in indicators : which means indicator's new high is higher than previous one (bullish pattern) but price has a new high not higher than previous one and here we could say price is not following the bullish pattern which would have a negative or bearish perception : look below pic
it might look confusing between the normal and hidden divergences but if we study above 4 pictures it is very easy and useful another thing about divergences is if we have divergence in short time chart the perception would be short time , if we have for example negative divergence in weekly or monthly , it would be very dangerous and we might see bearish in mid and long term...
