Divergence MACD Classic Bullish and Bearish Setups

MACD Classic divergence is used as a possible sign for a oil trend reversal. Classic divergence is used when looking for an zone where crude oil price could reverse & begin going in 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 crude oil market top or buy near the crude oil market bottoms, 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 Oil trade.

There are two types:

1. Oil Classic Bullish Divergence
2. Oil Classic Bearish Divergence

Crude Oil Classic Bullish Divergence

Classic bullish divergence occurs when crude oil trading price is making lower lows (LL), but the divergence macd indicator is making higher lows (HL).

Divergence MACD Classic Bullish

Classic bullish divergence warns of a possible change in the oil trend from down to up. This is because even though the crude oil price went lower the volume of sellers who pushed the crude oil price lower was less as illustrated by the MACD indicator. This is an technical indicator of the underlying weakness of the downwards trend.

Classic bearish Oil Trading Divergence Setup

Classic bearish divergence occurs when crude oil trading price is making a higher high (HH), but the divergence macd indicator is lower high (LH).

Divergence MACD Classic Bearish

Classic bearish divergence warns of a possible change in the oil trend from up to down. This is because even though the crude oil price went higher the volume of buyers that pushed the crude oil price higher was less as illustrated by the Divergence MACD indicator. This is an technical indicator of the underlying weakness of the upwards trend.

Divergence MACD Hidden Bullish and Bearish Setups

MACD Hidden divergence is used as a possible sign for a oil trend continuation.

This divergence trade setup occurs when crude oil price retraces to retest a previous high or low.

1. Oil Hidden Bullish Divergence

2. Oil Hidden Bearish Divergence

Crude Oil Hidden Bullish Divergence

Forms when crude oil trading price is making a higher low (HL), but the MACD oscillator is showing a lower low (LL).

Hidden bullish divergence occurs when there is a retracement in an upwards oil trend.

divergence MACD bullish

This divergence confirms that a retracement move is complete. This divergence indicates underlying strength of an upward oil trend.

Oil Hidden Bearish Divergence

Forms when crude oil trading price is making a lower high (LH), but the MACD oscillator is showing a higher high (HH).

Hidden bearish divergence occurs when there is a retracement in an upwards oil trend.

divergence MACD bearish

This divergence trade set-up confirms that a retracement move is complete. This diverging indicates underlying strength of a downward oil trend.