MA Convergence and Divergence MACD Classic Bullish and 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 and start going in the opposite trend direction. For this reason classic divergence is used as a low risk entry method and also as an accurate way to exit of a position.
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 in relation to the potential reward.
2. It is used to predict the optimum ideal point which to exit an open trade position.
There are 2 types:
- XAUUSD Classic Bullish Divergence Trading Setup
- XAUUSD Classic Bearish Divergence Trading Setup
Gold Classic Bullish Divergence Trading Setup
Classic bullish divergence forms when price is making/forming lower lows ( LL ), but oscillator technical indicator is making/forming higher lows (HL).
Moving Average Convergence & Divergence MACD Classic Bullish Divergence
Classic bullish divergence warns of a possible change in the trend from downward to upward. This is because even though the price went lower the volume of sellers that pushed the price lower was less like is shown by the Moving Average Convergence and Divergence MACD indicator. This shows under-lying weakness of the downwards trend.
Classic bearish Gold Trade Divergence Trading 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 price went higher the volume of buyers that pushed the price higher was less just as is shown by the Moving Average Convergence and Divergence MACD indicator. This shows under-lying weakness of the upwards trend.
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