MACD Classic Bullish and Bearish Divergence
MACD Classic divergence is used as a possible signal 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's a low risk technique to sell near the market top or buy near the market bottom, this makes the risks on your gold trades are small relative to potential reward.
2. It's used to predict the optimum point at which to exit a trade.
There are two types of Classic Divergence:
- XAUUSD Classic Bullish Divergence
- XAUUSD Classic Bearish Divergence
XAUUSD Classic Bullish Divergence in XAUUSD
Classic bullish divergence in xauusd occurs when price is forming lower lows ( LL ), but 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 headed lower the volume of sellers that moved the price lower was less as illustrated by 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 oscillator is lower high (LH).
MACD Classic Bearish Divergence in Gold - MACD Divergence XAUUSD Method
Classic bearish divergence signals a possible reversal in market trend from up to down. This is because even though the price headed higher the volume of buyers that moved the price higher was less as illustrated by MACD indicator. This indicates the underlying weakness of the up-ward trend.
