MACD Classic Bullish and Bearish Divergence
MACD Classic divergence pattern is used as a possible sign for a trend reversal. MACD classic divergence is used when looking for an area where xauusd trading price could reverse and start going in the opposite 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 trade.
1. It's a low risk technique to sell near the market tops or buy near the market bottom, this makes the risks on your trades are small in relation to the potential reward.
2. It's used to predict the optimum zone at which to exit a trade.
There are two different types of Classic Divergence:
- Gold Classic Bullish Divergence
- Gold Classic Bearish Divergence
XAUUSD Classic Bullish Divergence in XAUUSD Trading
Classic bullish divergence in gold trading occurs when price is making lower lows ( LL ), but the oscillator is forming higher lows (HL).
MACD Classic Bullish Divergence in Gold - MACD Divergence Strategy
Classic bullish divergence in gold trading warns of a possible change in the trend from downwards to upward. This is because though the price headed lower the volume of the sellers that moved price lower was less as shown by the MACD. This demonstrates underlying weakness of the down ward trend.
Classic bearish divergence in XAUUSD Trading
Classic bearish divergence in gold trading occurs when price is showing a higher high ( HH ), but the oscillator is lower high (LH).
MACD Classic Bearish Divergence in Gold - MACD Divergence Strategy
Classic bearish divergence warns of a possible reversal in market trend from upwards to downward. This is because though the price headed higher the volume of the buyers that moved price higher was less as shown by the MACD. This demonstrates underlying weakness of the upwards trend.
