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MACD Gold Trading Whipsaws and Fake Out Signals on Bearish and Bullish Territory

Since the MACD gold trading indicator is a leading indicator which sometimes gives whipsaws, we shall look at an example of a gold trading whipsaw generated by this MACD gold trading indicator, so as to illustrate why it's always good to wait for a confirmation gold trading signal.

MACD Gold Trading Indicator Gold Trading Whipsaw - Gold Trading Whipsaws

MACD Gold Trading Indicator Gold Trading Whipsaw - Gold Trading Whipsaws


The MACD indicator gave a buy gold trading signal, when this buy gold trading signal was generated and the MACD indicator line was still below the zero center line mark. At this point the buy gold trading signal had not been confirmed and it resulted into a gold trading whipsaw as illustrated by the moving averages which continued to move downwards.

 

A gold trading whipsaw signal is as a result of dramatic rise and fall in the gold price in a short time and in such a manner that skews the data used in calculating the moving averages that draw the MACD gold trading indicator data. These types of whipsaw moves are usually brought about because of some news event that can produce market noise.

 

Gold traders should have the ability to gauge a gold trading whipsaw and withstand the whipsaw; a gold trading whipsaw might result into an upswing session and then a downswing session. To minimize the risk of trading gold trading whipsaws, it's good to wait for confirmation of gold trading signals by waiting for MACD to cross above or below the zero center-line mark.

 

Combining MACD Crossover with Center-Line Crossover to Prevent Gold Trading Whipsaws

Buy gold trading signal - When there is a crossover, followed by a steep rise in gold price and then a center-line crossover the buy gold trading signal is confirmed.

 

Sell gold trading signal - When there is a crossover, followed by a steep decline in gold price and then a center-line crossover the sell gold trading signal is confirmed.

 

  • 1. Buy Gold Trading Signal in Bearish Territory Whipsaw

When a buy gold trading signal is generated in a bearish territory, it might result into a gold trading whipsaw especially if it is not followed soon by a MACD center line crossover.

 

In the gold trading example below, MACD gold trading indicator gives a buy gold trading signal even though it is in bearish territory, the MACD indicator then turns downwards and starts moving down again resulting into a gold trading whipsaw. By waiting for center line crossover it is possible to avoid the whipsaw.

However, in this case there was a brief center line crossing; this gold trading whipsaw would have been hard to trade using this MACD gold trading indicator alone, that is why it is good to combine the use of MACD indicator with another gold trading technical indicator. In the gold trading example below MACD is combined with the moving average gold trading indicators technical analysis.

 

MACD Gold Trading Whipsaw - Buy Gold Trading Signal in Bearish Territory

MACD Gold Trading Whipsaw - Buy Gold Trading Signal in Bearish Territory


  • 2. Sell Gold Trading Signal in Bullish Territory Whipsaw

When a sell gold trading signal is generated in a bullish territory, it might result into a gold trading whipsaw especially if it is not followed soon by a MACD center-line crossover.

 

In the gold trading example below, the MACD gold trading indicator gives a sell gold trading signal even though it is in bullish territory, the MACD gold trading indicator then turns up and starts moving upwards again resulting into a gold trading whipsaw. By waiting for center-line crossover it is possible to avoid the gold trading whipsaw. In the gold trading example below by combining this MACD indicator with the Moving Average Crossover Gold Trading Strategy you would have avoided this whipsaw.

MACD Gold Trading Whipsaw - Sell Gold Trading Signal in Bullish Territory

MACD Gold Trading Whipsaw - Sell Gold Trading Signal in Bullish Territory


To avoid gold trading whipsaws completely when trading the gold trading market with this MACD Gold Trading Indicator it is best to use the Center-line Crossover Signal as the Official Buy or Sell Gold Trading Signal of The MACD Gold Trading Indicator.

 

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