Engineering Alpha

Engineering Alpha

The Hidden Divergence - A Hidden Secret to Trend Following

Understand the Concept of Hidden Divergences and Their Role in Trading

Sofien Kaabar, CFA's avatar
Sofien Kaabar, CFA
May 27, 2025
∙ Paid

When we talk about divergence, we’re usually referring to a disconnect between price and an indicator — a sign that a reversal or continuation might be coming. Hidden divergence is a powerful, often overlooked version of this tool, especially when paired with the stochastic oscillator.

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