Hidden SMT Divergence ICT 01 [TradingFinder] HSMT SMC Technique

9 dic

🔵Introduction

Hidden SMT Divergence, an advanced concept within the Smart Money Technique (SMT), identifies discrepancies between correlated assets by focusing on their closing prices.

Unlike the standard SMT Divergence, which uses high and low prices for analysis, Hidden SMT Divergence uncovers subtle signals by examining divergences based on the assets' closing values.

These divergences often highlight potential reversals or trend continuations, making this technique a valuable tool for traders aiming to anticipate market movements.




This approach applies across various markets and asset classes, including:

Commodities: GOLD vs. SILVER or BRENT vs. WTI .
Indices: NDX vs. SPX vs. US30 .
FOREX: EURUSD vs. GBPUSD vs. DXY (US Dollar Index).
Cryptocurrencies: BTCUSD vs. ETHUSD vs. SOLUSDT vs. TOTAL3 .
Volatility Measures: XAUUSD vs. VIX (Volatility Index).

By identifying divergences within these asset groups, traders can gain actionable insights into potential market reversals or shifts in trend direction. Hidden SMT Divergence is particularly effective for pinpointing subtle market signals that traditional methods may overlook.

Bullish Hidden SMT Divergence: This divergence emerges when one asset forms a higher low, while the correlated asset creates a lower low in terms of their closing prices. It often signals weakening downward momentum and a potential reversal to the upside.






Bearish Hidden SMT Divergence: This occurs when one asset establishes a higher high, while the correlated asset forms a lower high based on their closing prices. It typically reflects declining upward momentum and a probable shift to the downside.






🔵How to Use

The Hidden SMT Divergence indicator provides traders with a systematic approach to identify market reversals or trend continuations through divergences in closing prices between two correlated assets.




🟣Bullish Hidden SMT Divergence

Bullish Hidden SMT Divergence occurs when the closing price of the primary asset forms a higher low, while the correlated asset creates a lower low. This pattern indicates weakening downward momentum and signals a potential reversal to the upside.

After identifying the divergence, confirm it using additional tools like support levels, volume trends, or indicators such as RSI and MACD. Enter a buy position as the price shows signs of reversal near support zones, ensuring proper risk management by placing a stop-loss below the support level.




Bearish Hidden SMT Divergence

Bearish Hidden SMT Divergence is identified when the closing price of the primary asset forms a higher high, while the correlated asset creates a lower high. This divergence suggests a weakening uptrend and a likely reversal to the downside.

Validate the signal by examining resistance levels, declining volume, or complementary indicators. Consider entering a sell position as the price starts declining from resistance levels, and set a stop-loss above the resistance zone to limit potential losses.




🔵Setting

Second Symbol: Select the secondary asset to compare with the primary asset. By default, "XAUUSD" (Gold) is used, but it can be customized to any stock, cryptocurrency, or currency pair.

Divergence Fractal Periods: Defines the number of past candles considered for identifying divergences. The default value is 2, but traders can adjust it for greater precision.

Bullish Divergence Line: Displays a dashed line connecting the points of bullish divergence.

Bearish Divergence Line: Shows a similar line for bearish divergence points.

Bullish Divergence Label: Marks areas of bullish divergence with a "+SMT" label.

Bearish Divergence Label: Highlights bearish divergences with a "-SMT" label.

Chart Type: Choose between Line or Candle charts for enhanced visualization.




🔵Conclusion

Hidden SMT Divergence offers traders a refined method for identifying market reversals by analyzing closing price discrepancies between correlated assets. Its ability to uncover subtle divergences makes it an essential tool for traders who aim to stay ahead of market trends.

By integrating this technique with other technical analysis tools and sound risk management, traders can enhance their decision-making process and capitalize on market opportunities with greater confidence.

Hidden SMT Divergence’s focus on closing prices ensures more precise signals, helping traders refine their strategies across various markets, including Forex, commodities, indices, and cryptocurrencies.

Its open-source nature allows for customization and verification, providing transparency and flexibility to suit diverse trading needs. Hidden SMT Divergence stands as a powerful addition to the arsenal of any trader seeking to unlock hidden opportunities in dynamic financial markets.