MACD Classic Bullish and MACD Bearish Divergence - MACD Classic Divergence PDF
MACD Classic divergence pattern is used as a possible signal for a trend reversal. MACD classic divergence is used when looking and searching for an area where price could reverse & begin going in the in the opposite trend trend trend trend trend trend trend trend direction. For this reason MACD classic divergence setup is used as a low risk entry method and also as an accurate way to exit of a trade transaction.
1. It's a low risk strategy to open sell at near the market top or buy at near the market bottoms, this makes the risk in your trades are small compared to potential reward.
2. Classic divergence setup is used to predict the optimum ideal point/level at which to exit a trade.
There are 2 types of Classic Divergence:
- Classic Bullish Trading Divergence Setup
- Classic Bearish Divergence Setup
Classic Bullish Divergence in Forex Trading
Classic bullish divergence in forex trading occurs when price is making/forming lower lows (LL), but the oscillator indicator is forming/making higher lows ( HL ).
MACD Classic Bullish Divergence in Forex Trading - MACD Divergence Strategy
Classic bullish divergence in forex warns of a possible change in the trend from downwards to upward. This is because though the price moved lower the volume of sellers which moved price lower was less such as displayed and illustrated by MACD indicator. This demonstrates underlying weakness of the downward market trend.
Classic bearish divergence in Forex Trading
Classic bearish divergence in forex trading occurs when price is forming/making a higher high (HH), but the oscillator technical indicator is lower high ( LH ).
MACD Classic Bearish Divergence in Forex Trading - MACD Divergence Strategy
Classic bearish divergence signals a possible shift in the market trend from upwards to downward. This is because though the price moved higher the volume of buyers that moved price higher was less just as is displayed and shown by MACD indicator. This reflects underlying weakness of the upwards market trend.
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