Gold Trading MACD Classic Bullish & Bearish Divergence
Moving Average Convergence and Divergence MACD Classic divergence is used as a possible sign for a gold trend reversal. Classic divergence is used when looking for an area where xauusd trading price could reverse & begin going in the 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 method to sell near the xauusd market tops or buy near the xauusd 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 Gold trade.
There are two types:
- Gold Trading Classic Bullish Divergence
- Gold Trading Classic Bearish Divergence
XAUUSD Classic Bullish Divergence
Classic bullish divergence forms when price is forming lower lows ( LL ), but oscillator technical indicator is forming higher lows (HL).
Moving Average Convergence & Divergence MACD Gold Classic Bullish Divergence
Classic bullish divergence warns of a possible change in gold trend from down to up. This is because even though the xauusd price went lower the volume of sellers that pushed the xauusd trading price lower was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This indicates underlying weakness of the downward trading trend.
Classic bearish Gold Trading Divergence Setup
Classic bearish divergence forms when the price is showing higher high ( HH ), but the oscillator technical indicator is lower high (LH).
Moving Average Convergence & Divergence MACD Gold Trading Classic Bearish Divergence
Classic bearish divergence warns of a possible change in gold trend from up to down. This is because even though the xauusd trading price went higher the volume of buyers who pushed the xauusd trading price higher was less as illustrated by the Moving Average Convergence and Divergence MACD indicator. This indicates underlying weakness of the upward trading trend.
