MACD Oil Trading Classic Bullish & Bearish Divergence
MACD Oil Trading Classic divergence is used as a possible sign for a oil trend reversal. MACD classic divergence is used when looking for an area where crude oil price could reverse and start going in the opposite oil 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 oil 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 crude oil 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 different types of Oil Trading Classic Divergence:
- Crude Oil Classic Bullish Divergence
- Oil Classic Bearish Divergence
Oil Trading Classic Bullish Divergence in Oil Trading
Classic bullish divergence in oil trading occurs when crude oil price is making lower lows ( LL ), but the oscillator technical trading indicator is making higher lows ( HL ).
MACD Oil Trading Classic Bullish Divergence in Oil Trading - MACD Divergence Strategy
Classic bullish divergence in oil trading 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 indicates underlying weakness of the downwards crude oil trend.
Classic bearish divergence in Oil Trading
Classic bearish divergence in oil trading occurs when crude oil price is making a higher high ( HH ), but the oscillator technical trading indicator is lower high ( LH ).
MACD Oil Classic Bearish Divergence in Oil Trading - MACD Divergence Oil Strategy
Classic bearish divergence warns of a possible change in crude oil market oil trend from up to down. This is because even though the crude oil price went higher the volume of buyers who pushed the crude oil price higher was less as illustrated by the MACD indicator. This indicates underlying weakness of the upward crude oil trend.
