If you see price tracing lower lows and indicators tracing higher lows (regular bullish pattern), the assumption would be to look out to go long. But if this period of action also shows prices tracing lower highs and indicators tracing higher highs (hidden bearish continuation pattern), the assumption is a continuation of the downtrend.
When you experience this, do you:
1. hold your short position or enter into a short with the assumption that price is going to continue down.
2. close your short position or stay out of a trade because of the conflicting signals and wait for the outcome.
3. enter a long position favouring the regular divergence over the hidden even though the recent trend is down.
Or anything else you look to for further confirmation of expected future price movement?
When you experience this, do you:
1. hold your short position or enter into a short with the assumption that price is going to continue down.
2. close your short position or stay out of a trade because of the conflicting signals and wait for the outcome.
3. enter a long position favouring the regular divergence over the hidden even though the recent trend is down.
Or anything else you look to for further confirmation of expected future price movement?
