Divergence MACD Classic Bullish and Bearish Setups

MACD Classic divergence is used as a possible sign for a commodity trend reversal. Classic divergence is used when looking for an area where commodity price could reverse & begin going in the opposite direction. For this reason classic divergence is used as a low risk entry technique and also as an accurate way of exit out of a trade.

1. It is a low risk method to sell near the commodities trading market top or buy near the commodities market bottom, 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 Commodity trade.

There are two types:

1. Commodity Trading Classic Bullish Divergence
2. Commodity Trading Classic Bearish Divergence

Commodities Classic Bullish Divergence

Classic bullish divergence occurs when price is forming 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 commodity trend from down to up. This is because even though the commodity price went lower the volume of sellers who pushed the commodity price lower was less as illustrated by the MACD indicator. This is an technical indicator of the underlying weakness of the downwards trend.

Classic bearish Commodities Trading Divergence Setup

Classic bearish divergence occurs when price is showing 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 commodity trend from up to down. This is because even though the commodity price went higher the volume of buyers who pushed the commodity price higher was less as illustrated by the Divergence MACD indicator. This is an technical indicator of the underlying weakness of the upwards trend.

Divergence MACD Hidden Bullish and Bearish Setups

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

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

1. Commodity Trading Hidden Bullish Divergence

2. Commodity Trading Hidden Bearish Divergence

Commodity Trading Hidden Bullish Divergence

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

Hidden bullish divergence occurs when there is a retracement in an upwards commodities trend.

divergence MACD bullish

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

Commodities 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 upwards commodities trend.

divergence MACD bearish

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