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 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 commodity trade.
1. It is a low risk method to sell near the commodity market top 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:
- Commodity 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 making lower lows (LL), but the oscillator is making higher lows (HL).
MACD Commodity Trading Classic Bullish Divergence in Commodities Trading - MACD Divergence Commodity Trading 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 price went lower the volume of sellers that pushed the commodities price lower was less as illustrated by the MACD commodity indicator. This indicates underlying weakness of the downward commodities trend.
Classic bearish divergence in Commodities
Classic bearish divergence in commodity occurs when commodities price is making a higher high (HH), but the oscillator is lower high (LH).
MACD Commodity Trading Classic Bearish Divergence in Commodities Trading - MACD Divergence Commodity Trading Strategy
Classic bearish divergence warns of a possible change in the commodity market commodity trend from up to down. This is because even though the commodities price went higher the volume of buyers that pushed the commodities price higher was less as illustrated by the MACD commodity indicator. This indicates underlying weakness of the upward commodities trend.
