MACD Commodity Classic Bullish and Bearish Divergence
MACD Commodity Trading Classic divergence is used as a possible sign for a commodity trend reversal. MACD classic divergence is used when looking for an area where commodity price could reverse and start going in the opposite commodity trend direction. For this reason MACD classic divergence is used as a low risk entry method and also as an accurate way of exit out of a commodity trade.
1. It is a low risk method to sell near the commodities trading market tops or buy near the commodities trading market bottom, this makes the risk on your commodities trades are very small relative to the potential reward.
2. It is used to predict the optimum point at which to exit a Commodity trade.
There are two types of Commodity Trading Classic Divergence:
- Commodity Trading Classic Bullish Divergence
- Commodity Trading Classic Bearish Divergence
Commodity Classic Bullish Divergence in Commodity Trading
Classic bullish divergence in commodity trading occurs when price is forming lower lows (LL), but the oscillator trading indicator is making higher lows (HL).
MACD Commodity Classic Bullish Divergence in Commodity Trading - MACD Divergence Strategy
Classic bullish divergence in commodity trading 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 indicates underlying weakness of the downwards commodities trend.
Classic bearish divergence in Commodity Trading
Classic bearish divergence in commodity trading occurs when price is forming a higher high (HH), but the oscillator indicator is lower high (LH).
MACD Commodity Trading Classic Bearish Divergence in Commodity Trading - MACD Divergence Strategy
Classic bearish divergence warns of a possible change in commodities trading market 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 MACD indicator. This indicates underlying weakness of the upwards trend.
