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 xauusd trend reversal. Classic divergence is used when looking for an area where gold trading price could reverse and begin going in the 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 xauusd market top or buy near the xauusd 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 XAUUSD trade.
There are two types:
- XAUUSD Classic Bullish Divergence
- Gold Classic Bearish Divergence
XAUUSD Classic Bullish Divergence
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 XAUUSD Classic Bullish Divergence
Classic bullish divergence warns of a possible change in the xauusd trend from down to up. This is because even though the gold price went lower the volume of sellers who pushed the gold trading price lower was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This indicates underlying weakness of the downwards trading trend.
Classic bearish Gold Trading Divergence Setup
Classic bearish divergence forms when price is showing higher high ( HH ), but the oscillator technical indicator is lower high (LH).
Moving Average Convergence & Divergence MACD XAUUSD Classic Bearish Divergence
Classic bearish divergence warns of a possible change in xauusd trend from up to down. This is because even though the gold price went higher the volume of buyers who pushed the gold trading price higher was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This indicates underlying weakness of the upward trading trend.
