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Let’s set the record straight on divergences, because too many traders are out here treating them like magic reversal wands. That’s not what they are. A divergence is not some mystical market omen—it’s a tool. And if you understand it right, it becomes one of your sharpest tools for continuation trading. Today, we wrapped up our three-part series on divergences, and this one’s the closer: Hidden Divergences.

Now, if you missed the previous two weeks, stop right here and go back. This week builds on that foundation. We’re not just labeling divergences—we’re building positions, protecting profits, and, most importantly, letting the trend run. Because when it comes to hidden divergences, the name of the game is continuation.

Here’s the crux of it… 

A hidden divergence shows up when price says one thing and the indicator screams something else—but it’s the price that’s telling the truth. That’s right. Price is right. And when that divergence forms, it’s like a market reset. The indicator overextends in the wrong direction, creating a fresh opportunity to add to a winning position or even initiate one in the direction of the prevailing trend.

I walked you through this using stochastics—7, 3, 3 full stochastics to be specific. But let me be clear: I’m not trading reversals based on the oscillator itself. I don’t care about stochastics going overbought or RSI reversing off 70. That’s fluff. What I care about is the disagreement. That’s the signal.

When you see the indicator diverging but price making higher lows in an uptrend (or lower highs in a downtrend), that’s your Let It Ride moment. It's not a reversal signal; it's confirmation that the trend is healthy and ready for another leg. You measure from the last low close to the last high close and project that forward. It’s non-discretionary. No guesswork. The data lays out your targets, and your job is to trust it.

We applied this across instruments—S&P, Bitcoin, Tesla, Gold, and the Euro. It doesn’t matter the timeframe or the ticker. If there's liquidity, you'll find hidden divergences, and if you're disciplined, you'll ride those moves with precision.

But here’s the truth—seeing the divergence is only half the battle. The hardest part? Trusting the setup. Pushing the button. Letting the trend run when everything in you wants to take profits early. That’s the difference between dabbling and trading.

So remember: Don’t treat divergences like reversal magic. Learn to spot the hidden ones. Ride them. Measure them. Trade them with conviction. And above all, listen to the chart. Because in the end, the indicator may scream—but the price whispers the truth. And that’s where the profit lies.

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