Divergence MACD Classic Bullish and Bearish Setups
MACD Classic divergence is used as a possible sign for a cfd trend reversal. Classic divergence is used when looking for an area where cfds price could reverse and start going in the opposite direction. For this reason classic divergence is used as a low risk entry technique & also as an accurate way of exit out of a trade.
1. It is a low risk technique to sell near the cfd market tops or buy near the cfd market bottom, this makes the risk on your trades are very small relative to the potential reward.
2. It is used to predict the optimum point at which to exit a CFD trade.
There are two types:
- CFDs Classic Bullish Divergence
- CFDs Classic Bearish Divergence
CFDs Classic Bullish Divergence
Classic bullish divergence occurs when cfds 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 cfd trend from down to up. This is because even though the cfds price went lower the volume of sellers that pushed the cfds price lower was less as illustrated by the MACD indicator. This is an technical indicator of the underlying weakness of the downward trend.
Classic bearish CFD Trading Divergence Setup
Classic bearish divergence occurs when cfds 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 cfd trend from up to down. This is because even though the cfds price went higher the volume of buyers who pushed the cfds price higher was less as illustrated by the Divergence MACD indicator. This is an technical indicator of the underlying weakness of the upward trend.
Divergence MACD Hidden Bullish and Bearish Setups
MACD Hidden divergence is used as a possible sign for a cfd trend continuation.
This divergence trade setup occurs when cfds price retraces to retest a previous high or low.
1. CFD Hidden Bullish Divergence
2. CFD Hidden Bearish Divergence
CFDs Hidden Bullish Divergence
Forms when cfds price is making higher low ( HL ), but the MACD oscillator technical indicator is showing a lower low (LL).
Hidden bullish divergence occurs when there is a retracement in an upward cfds trend.
divergence MACD bullish
This divergence confirms that a retracement move is complete. This divergence indicates underlying strength of an upward cfds trend.
CFDs Hidden Bearish Divergence
Forms when cfds 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 upward cfds trend.
divergence MACD bearish
This divergence trade setup confirms that a retracement move is complete. This diverging indicates underlying strength of a downward cfds trend.
