Practical Classroom------MACD and Top and Bottom Divergence

MACD is one of the most basic indicators in technical analysis of trading. It is widely used by everyone and is also one of the most used indicators by dealers. Using the MACD indicator, you can find investment opportunities in the trend and improve the accuracy of operation, so it is recommended that you focus on learning it.

However, it should be noted that since MACD is a moving average, the signal given is delayed, and the golden cross may appear only after the rise, so we cannot only use this indicator to operate, but we must combine various factors to look at it together.

Application 1----Bottom Divergence (Figure 1)

When the currency price continues to hit a new low, one peak is lower than the other, but the peak of the NACD indicator is larger than the previous one, then the bottom divergence of the price and the indicator is formed. At the same time as the bottom divergence, the trading volume continues to shrink, which is the time to buy. After the bottom divergence is completed, the trading volume gradually increases, and the bullish signal is stronger.

Application 2----Top Divergence (Figure 2)

When the price of a currency hits new highs continuously, with each peak higher than the previous one, but the peak value of the MACD indicator is smaller than the previous one, and the red column becomes shorter, a top divergence between the price and the indicator is formed, which is an opportunity to sell.