MACD Commodity Trading Classic Bullish and Bearish Divergence
MACD Commodity Trading Classic divergence is used as a possible sign for a commodity trend reversal. MACD classic divergence is used when looking for an area where commodities trading price could reverse and start going in the opposite commodity 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 commodities trade.
1. It is a low risk method to sell near the commodity market tops or buy near the commodity market bottom, this makes the risk on your commodities trades are very small relative to the potential reward.
2. It is used to predict the optimum point at which to exit a Commodities trade.
There are two different types of Commodity Trading Classic Divergence:
- Commodities Trading Classic Bullish Divergence
- Commodity Trading Classic Bearish Divergence
Commodity Trading Classic Bullish Divergence in Commodities
Classic bullish divergence in commodity occurs when commodities price is forming lower lows ( LL ), but the oscillator indicator is forming higher lows (HL).
MACD Commodity Trading Classic Bullish Divergence in Commodities Trading - MACD Divergence Strategy
Classic bullish divergence in commodity warns of a possible change in the commodity trend from down to up. This is because even though the commodities trading price went lower the volume of sellers who pushed the commodities trading price lower was less as illustrated by the MACD indicator. This indicates underlying weakness of the downwards commodities trend.
Classic bearish divergence in Commodities
Classic bearish divergence in commodity occurs when commodities price is showing a higher high ( HH ), but the oscillator indicator is lower high (LH).
MACD Commodity Trading Classic Bearish Divergence in Commodities Trading - MACD Divergence Strategy
Classic bearish divergence warns of a possible change in commodity market commodity trend from up to down. This is because even though the commodities trading price went higher the volume of buyers who pushed the commodities trading price higher was less as illustrated by the MACD indicator. This indicates underlying weakness of the upward commodities trend.
