Moving Average Convergence and Divergence MACD Classic Bullish and Bearish Divergence
Moving Average Convergence and Divergence MACD Classic divergence is used as a possible sign for a cfd trend reversal. Classic divergence is used when looking for an zone where cfd price could reverse & start going in opposite direction. For this reason classic divergence is used as a low risk entry method & also as an accurate way of exit out of a trade.
1. It is a low risk technique to sell near the cfd market top or buy near the cfd market bottoms, this makes the risk on your trades are very small relative to the potential reward.
2. It's used to predict the optimum point at which to exit a CFD trade.
There are two types:
- CFD Classic Bullish Divergence
- CFD Classic Bearish Divergence
CFDs Classic Bullish Divergence
Classic bullish divergence setup occurs when price is forming lower lows (LL), but oscillator technical trading indicator is making higher lows ( HL ).
Moving Average Convergence & Divergence MACD CFD Classic Bullish Divergence
Classic bullish divergence warns of a possible change in the cfd trend from down to up. This is because even though the cfd price went lower the volume of sellers that pushed the cfd price lower was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This is an technical indicator of the underlying weakness of the downwards trend.
Classic bearish CFD Trading Divergence Setup
Classic bearish divergence setup forms when price is forming higher high (HH), but the oscillator technical trading indicator is lower high ( LH ).
Moving Average Convergence & Divergence MACD CFD Classic Bearish Divergence
Classic bearish divergence warns of a possible change in cfd trend from up to down. This is because even though the cfd price went higher the volume of buyers who pushed the cfd price higher was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This is an technical indicator of the underlying weakness of the upwards trend.
