{x} | Trading.live

Trading MACD divergence is a very common used method. One of the most common setups is to find chart points at which price makes a new swing high or a new swing low, but the MACD histogram does not, indicating a divergence between price and momentum.

While there are many strategies that one can develop, the MACD divergence with a combination of double top and bottom price action method can yield big winning trades.

Regular divergence pattern comes in two forms: bullish divergence (or bottom divergence) and bearish divergence (top divergence).

Bullish MACD Divergence

Bullish MACD Divergence – A bullish MACD divergence occurs when the price action is moving downwards and the MACD is showing higher bottoms. In this case, the MACD indicator is giving us a strong bullish signal. Very often we will see price begin a strong upwards move after a bullish divergence with the MACD.

Bearish MACD Divergence

Bearish MACD Divergence – The bearish MACD