MACD Forex Classic Bullish and MACD Forex Bearish Divergence - MACD Classic Divergence PDF
MACD Forex Classic divergence is used as a possible sign for a forex trend reversal. MACD classic divergence is used when looking for an area where price could reverse and start going in the opposite forex 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 forex trade.
1. It is a low risk method to sell near the forex market top or buy near the forex market bottoms, this makes the risk on your forex trades are very small relative to the potential reward.
2. Classic divergence is used to predict the optimum point at which to exit a Forex trade.
There are two types of Forex Classic Divergence:
- Classic Bullish Forex Trading Divergence
- Classic Bearish Divergence
Classic Bullish Divergence in Forex Trading
Classic bullish divergence in forex trading occurs when price is making lower lows (LL), but the oscillator technical indicator is making higher lows ( HL ).
MACD Classic Bullish Divergence in Forex Trading - MACD Divergence Strategy
Classic bullish divergence in forex trading warns of a possible change in the forex 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 downward forex market trend.
Classic bearish divergence in Forex Trading
Classic bearish divergence in forex trading occurs when price is making a higher high (HH), but the oscillator technical indicator is lower high ( LH ).
MACD Classic Bearish Divergence in Trading - MACD Divergence Strategy
Classic bearish divergence warns of a possible change in the forex market 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 as illustrated by the MACD indicator. This indicates underlying weakness of the upward forex market trend.
