Divergence MACD Classic Bullish and Bearish Setups

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 and start going in opposite direction. For this reason classic divergence is used as a low risk entry technique & 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:

1. CFDs Classic Bullish Divergence
2. CFD Classic Bearish Divergence

CFD Classic Bullish Divergence

Classic bullish divergence occurs when price is making lower lows ( LL ), but the divergence macd indicator is making higher lows (HL).

Divergence MACD Classic Bullish

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 who pushed the cfd price lower was less as illustrated by the MACD indicator. This is an technical indicator of the underlying weakness of the downward trend.

Classic bearish CFDs Trading Divergence Setup

Classic bearish divergence occurs when price is making a higher high ( HH ), but the divergence macd indicator is lower high (LH).

Divergence MACD Classic Bearish

Classic bearish divergence warns of a possible change in the cfd trend from up to down. This is because even though the cfd price went higher the volume of buyers that pushed the cfd price higher was less as illustrated by the Divergence MACD indicator. This is an technical indicator of the underlying weakness of the upward trend.

Divergence MACD Hidden Bullish and Bearish Setups

MACD Hidden divergence is used as a possible sign for a cfd trend continuation.

This divergence trade set-up occurs when price retraces to retest a previous high or low.

1. CFD Hidden Bullish Divergence

2. CFD Hidden Bearish Divergence

CFD Hidden Bullish Divergence

Forms when price is making higher low ( HL ), but MACD oscillator indicator is showing lower low (LL).

Hidden bullish divergence occurs when there is a retracement in an upward cfds trend.

divergence MACD bullish

This divergence confirms that a retracement move is complete. This divergence indicates underlying strength of an upward cfds trend.

CFDs Hidden Bearish Divergence

Forms when price is making a lower high ( LH ), but the MACD oscillator is showing a higher high (HH).

Hidden bearish divergence occurs when there is a retracement in an upward cfds trend.

divergence MACD bearish

This divergence trade set-up confirms that a retracement move is complete. This diverging indicates underlying strength of a downward cfds trend.