I'm working on trading based on Divergences in price action and the MACD volume levels. I am observing if Higher Highs (HH) in price action are simultaneously resulting in parallel HH's for the MACD levels below and vice versa for Lower Lows (LL). If this is observed we are observing a divergence in price action and average momentum of trades. Remember that the MACD weighs the average of the last candlesticks (my MACD weighs the last 13 and 21 candlesticks on a 1hr chart), therefore if price action occurs too fast, the average of the MACD will not correlate with the change in price action unless the price action change is substantial enough that it alters the Moving Average significantly to cause a correlation to be observed.
I am using the divergences of the MACD as a strategy to predict when entry and exit points as trend changes are preparing to occur. This is because changes in price action can be very misleading causing emotional decision making that is irrational. In most cases either the trader will get tricked in to either chasing the market (Dumb Money) or closing out of a position prematurely because of sudden movements in price action.
I am using the divergences of the MACD as a strategy to predict when entry and exit points as trend changes are preparing to occur. This is because changes in price action can be very misleading causing emotional decision making that is irrational. In most cases either the trader will get tricked in to either chasing the market (Dumb Money) or closing out of a position prematurely because of sudden movements in price action.