RSI Hidden Divergence Strategy (Hidden Divergence for Trend Continuation)



Logical Explanation: Regular divergence indicates reversal, while hidden divergence indicates **trend continuation**. It occurs during trend retracements when the price lows are higher than the previous lows (uptrend), but the RSI lows are lower than the previous lows. This suggests the trend is extremely strong, and the retracement is just a shakeout.

* Detailed Operation:

1. Confirm the main trend: Use only during retracements in a unidirectional market.

2. Look for signals:

* Bullish hidden divergence: Price lows are higher, RSI lows are lower.

3. Entry: Open a position when RSI turns upward from the oversold zone.

4. Stop loss: Set at the previous price low.

Case Analysis:

In a bull market, ETH price retraced from 2000 to 2200 (higher lows), but at this time, the RSI indicator broke below the 2000 low.

* Result: This indicates that the bullish momentum is severely underestimated, and a stronger rally than the previous wave usually follows.
$ETH
ETH-0.7%
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