MACD Classic Bullish & Bearish Divergence

MACD Classic divergence is used as a possible sign for a trend reversal. MACD classic divergence is used when looking for an area where gold price could reverse and start going in the opposite 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 gold 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 gold trades are very small relative to the potential reward.

2. It is used to predict the optimum point at which to exit a trade.

There are two types of Classic Divergence:

1. XAUUSD Classic Bullish Divergence
2. Gold Classic Bearish Divergence

XAUUSD Classic Bullish Divergence in XAUUSD

Classic bullish divergence in xauusd occurs when price is forming lower lows ( LL ), but the oscillator is forming higher lows (HL).

MACD Classic Bullish Divergence in Gold - MACD Divergence XAUUSD Method

Classic bullish divergence in xauusd warns of a possible change in the trend from down to up. This is because even though the price went lower the volume of sellers who pushed the price lower was less as illustrated by the MACD indicator. This indicates underlying weakness of the down-wards gold trend.

Classic bearish divergence in XAUUSD

Classic bearish divergence in xauusd occurs when price is showing a higher high ( HH ), but the oscillator is lower high (LH).

MACD Classic Bearish Divergence in Gold - MACD Divergence XAUUSD Method

Classic bearish divergence warns of a possible change in market trend from up to down. This is because even though the price went higher the volume of buyers who pushed the price higher was less as illustrated by the MACD indicator. This indicates underlying weakness of the up-wards trend.