MA Convergence and Divergence MACD Classic Bullish & Bearish Divergence
Moving Average Convergence and Divergence MACD Classic divergence pattern is used as a possible sign for a trend reversal. Classic divergence is used when looking for an area where gold price could reverse and begin going in the opposite direction. For this reason classic divergence is used as a low risk entry method and also as an accurate way of exit out of a trade.
1. It is a low risk technique to sell near the market top or buy near the 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 level at which to exit a trade.
There are 2 types:
- XAUUSD Classic Bullish Divergence Setup
- XAUUSD Classic Bearish Divergence Setup
Gold Classic Bullish Divergence Setup
Classic bullish divergence forms when price is forming lower lows ( LL ), but oscillator technical indicator is forming higher lows (HL).
Moving Average Convergence & Divergence MACD Classic Bullish Divergence
Classic bullish divergence warns of a possible change in the trend from down to up. This is because even though the market price went lower the volume of sellers that pushed the price lower was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This shows underlying weakness of the downward trend.
Classic bearish Gold Trade Divergence Setup
Classic bearish divergence forms when the price is showing higher high ( HH ), but oscillator technical indicator is lower high (LH).
Moving Average Convergence & Divergence MACD Classic Bearish Divergence
Classic bearish divergence warns of a possible change in trend from up to down. This is because even though the market price went higher the volume of buyers that pushed the price higher was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This shows underlying weakness of the upwards trend.
