MACD Energies Trading Classic Bullish and Bearish Divergence

MACD Energies Trading Classic divergence is used by traders as a possible sign for a trend reversal. MACD classic divergence is used when looking for an area where 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 is a low risk method to sell near the market top or buy near the market bottoms, this makes the risk on your trades are very small relative to the potential reward.

2. It is used to predict the optimum zone at which to exit a trade.

There are two different types of Energies Trading Classic Divergence:

1. Energies Trade Classic Bullish Divergence
2. Energy Trading Classic Bearish Divergence

Energies Trading Classic Bullish Divergence in Energies

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

MACD Energies Trading Classic Bullish Divergence in Energies Trading - MACD Divergence Strategy Method

Classic bullish divergence in energies warns of a possible change in the 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 illustrated by the MACD indicator. This indicates underlying weakness of the downwards trend.

Classic bearish divergence in Energies

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

MACD Energies Trade Classic Bearish Divergence in Energies Trading - MACD Divergence 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 illustrated by the MACD indicator. This indicates underlying weakness of the up-wards trend.