MACD CFD Classic Bullish & Bearish Divergence

MACD CFD Trading Classic divergence pattern is used by traders as a possible sign for a cfd trend reversal. MACD classic divergence is used when looking for an area where price could reverse and start going in the opposite cfd 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 transaction.

1. It is a low risk method 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's used to predict the optimum point at which to exit a trade.

There are 2 types of CFD Trading Classic Divergence:

1. CFDs Classic Bullish Divergence
2. CFDs Classic Bearish Divergence

CFD Classic Bullish Divergence in CFD

Classic bullish divergence in cfd occurs when price is forming lower lows (LL), but the oscillator indicator is making higher lows ( HL ).

MACD CFD Classic Bullish Divergence in CFDs - MACD Divergence CFD Strategy

Classic bullish divergence in cfd warns of a possible change in the cfd trend from down to up. This is because even though the price went lower the volume of sellers who pushed the price lower was less as highlighted by the MACD indicator. This shows underlying weakness of the downward trend.

Classic bearish divergence in CFD

Classic bearish divergence in cfd occurs when price is forming a higher high (HH), but the oscillator indicator is lower high ( LH ).

MACD CFD Classic Bearish Divergence in CFDs - MACD Divergence CFD Strategy

Classic bearish divergence warns of a possible change in market trend from up to down. This is because even though the price went higher the volume of buyers who pushed the price higher was less as highlighted by the MACD indicator. This indicates underlying weakness of the upward trend.