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Divergence and Convergence: How to Read Market SignalsThe cryptocurrency market, like any financial market, is full of paradoxes. Price can rise, yet the strength of the trend is already weakening. Indicators may show that the move is “running on fumes,” but most traders keep buying at the top or selling at the bottom. The result is always the same: emotional trading and chaos instead of system and consistency. The main problem is that most participants only look at price. But price is just the tip of the iceberg. Beneath it lie volumes, momentum, trader sentiment, and recurring statistical patterns. This is where divergence and convergence come into play — signals that often warn of a trend change long before it becomes obvious. What are Divergence and Convergence Divergence occurs when the price makes new highs or lows, but a momentum indicator (such as RSI or MACD) shows the opposite — weakening strength. It’s a signal that the trend is losing energy and the probability of reversal is rising. Convergence is the opposite. The price updates a low, but the indicator shows higher readings. This suggests sellers are losing steam and buyers may soon regain control. On the chart, these may look like small details, but for an attentive trader, they mark turning points — the very beginnings of shifts that later become obvious to everyone else. Why These Signals Matter Imagine Bitcoin climbing from $105,000 to $118,000. Everyone is euphoric, and newcomers rush to open longs, hoping for more upside. Meanwhile, RSI is already showing divergence: price is up, momentum is down. For a careful trader, that’s a red flag. Moments like this help avoid buying at the peak and prepare for an incoming correction. More importantly, divergences not only give exit signals but also highlight potential reversal zones — places where traders can plan new entries in the opposite direction. How to Read Divergence and Convergence Compare price highs/lows with the indicator. If price rises but the indicator falls — it’s divergence. Check the context. A single signal on the indicator means little. Support/resistance levels, volumes, and candlestick structure matter. Be patient. Divergence can form over several candles, and the market often makes one last push before turning. Combine tools. Use divergence alongside TP/SL zones and trendlines to improve accuracy. Common Mistakes Many beginners make the same error: they see divergence and instantly trade against the trend. That’s wrong. Divergence isn’t a “buy/sell button,” it’s a warning. It says: “Be cautious, momentum is fading.” The actual reversal must still be confirmed by price structure and volumes. Another mistake is ignoring timeframe. Divergence on a 5-minute chart may only play out for a few dollars, but on a 4H or daily chart, the move could be massive. Building it Into a System This is the crucial part. An indicator alone won’t make a trader successful. Divergence and convergence need to be part of a system where: - entry and exit zones are pre-defined, - profit targets are clearly marked, - risk is limited by stop-losses, - and decisions are made without emotions, based on structure. This is where algorithms and automation prove invaluable. An automated model spots divergence earlier than the eye, flags conditions for a probable trend shift, and guides the trade step by step. Why It Works Markets move in cycles, and history repeats. Divergence and convergence are not magic, but a reflection of market physics: momentum fades, energy runs out, and no trend lasts forever. Ignoring these signals means trading blind. Integrating them into a structured process means having a map of potential scenarios ahead of time. It doesn’t guarantee perfection, but it eliminates guesswork and replaces it with probabilities and discipline. Conclusion Divergence and convergence are market warnings for those who pay attention. They help traders exit on time, avoid entering at peaks, and prepare for reversals. Most importantly, they train discipline and patience — the qualities that separate long-term survivors from those who get washed out. In a world where emotions break strategies, systematic analysis provides the edge. Automation, technical tools, and the ability to read market structure turn chaos into a structured process. For traders seeking to look deeper than just price, divergence and convergence are signals worth learning to read as carefully as a book.
Education
by CryptoVision
MACD-Divergences: Assessing Present Varying Exemplifications!_____ Hello Traders Investors And Community, _____ Welcome to this tutorial in which I will analyze the MACD-Divergence and its various types that can come up in the market movements. The MACD is an indicator developed in 1986 and since then established as a primary indicator in the oscillator types besides the RSI or stochastic. The indicator mainly has the function of spotting reversals and potential entry points into the market to catch the appropriate values and upcoming reversal developments. Although the indicator can be used as a single signal for market action only it is best combined with other technical analysis aspects such as candlesticks or volume. The main timeframe to apply the indicator should be the daily timeframe, it can be also applied to higher timeframes such as the weekly to assess broader trends. The indicator can also be applied on lower timeframes such as the 4-hour or hourly however in this case the fake signals getting higher. The MACD consists of 3 main elements, the first is the MACD-Line marked in my chart in orange which is calculated by the 12-day EMA (Exponential-Moving-Average) minus the 26-day EMA. The second element is the signal-line which is a 9-day EMA. Further comes the histogram which measures the distance from the MACD-Line to the signal line and the histogram is positive when the MACD-Line is above the signal-line as well as negative when it is below. The main signal happens when the MACD-Line crosses the signal-line when it crosses from the downside to the upside this is typically seen before a bullish reversal takes place and the same in reverse with the MACD-Line crossing the signal-line down when a bearish reversal takes place, in both cases also the histogram changes from positive to negative or negative to positive. In any case, it is always necessary to combine the MACD with the current price-action happening as in this case comes the interesting part with the divergences happening that can lead to dedicated signals. These divergences happen when there is a discrepancy between MACD and the actual price-action happening indicating a potential change in direction of actual price-action as the MACD shows up with these signs. In any case, it is unavoidable to consider the price-action together with the MACD as otherwise, it can lead to catching a fake-out and getting stopped out of the position what should be avoided in trading. The MACD also does not typically spot overbought or oversold conditions as it is an indicator consisting of EMAs it represents the previously developed price-actions in relation to the ongoing and upcoming price-actions. _____ Regular MACD Divergences: __ Classical MACD Crossover - The Classical MACD Crossover comes up when the MACD-line crosses the signal-line either from the upside to the downside or from the downside to the upside. Both versions can indicate a reversal into the direction the MACD-line crossed the signal-line however the timeframe and structure is important here. When this crossover happens on the lower timeframes below 6-hours it can happen that there are many fake signals with several crossovers behind each other while the price-action is actually trending into one direction. The higher timeframes such as the daily are therefore the best to apply this regular classical MACD crossover. Classical MACD Histogram Divergence - This divergence occurs when the histogram has formed a new high together with the price-action, for example, the histogram forms the new high at 0.3 in the MACD-histogram then the price-action moves further and forms a higher high exceeding the previous one however the MACD-histogram does not do a higher high also while staying below the 0.3 level. This indicates that the market is likely to reverse into the other direction because the histogram does not correspond with the actual price-action and therefore forms a divergence. This can be applied in the reverse direction as well and a good combination would be to look also at the volume or overbought and oversold conditions. Histogram Divergence Fakeout - In this case, it is the crucial part of the histogram divergence. The price-action and MACD fulfilled the initial requirements for a classical MACD histogram divergence and the price-action should markdown after forming the final high and the divergence, however in this case it does not happen instead the price-action moves lower a little bit signaling the possible normal development after this signal and then moves up again exceeding the previous high and stopping out traders who may have entered the market because of the divergence, after that the price-action can markdown finally and move lower, therefore it is necessary to look at the price-action also and see if the market is really ready to markdown after the signal. __ Bearish Regular Divergence Ⅰ - The Bearish Regular Divergence Ⅰ is a divergence in the price-action that marks two important confirmations including this a technical confirmation in the MACD normally seen in price-action. In this divergence, the price-action marks consecutive higher highs while the MACD forms a double-top with the rejection at the upper baseline confirming the double-top. This divergence is likely to reverse the previously established bullish trend to the downside and continue with bearish determinations. It is important to watch out for fakeouts before potentially entering and when this possibility is low it can be a good entry. Bullish Regular Divergence Ⅰ - This is the counterpart to the Bearish Regular Divergence Ⅰ. In this case the price-action marks lower lows in the structure in the best case also with falling volume and momentum while the MACD makes a double-bottom which is a good sign when both form that the price will likely reverse into the bullish direction. A trendline breakout of the previous established lower highs in the downtrend can also add additional confirmation to the final bullish reversal. __ Bearish Regular Divergence Ⅱ - This is a very interesting divergence as it combines the classical price-action formation double-top with the lower highs forming in the MACD. A confirmed double top alone can also be a strong signal for a reversal nevertheless with the additional MACD making lower lows this can add to the main bearish reversal coming in and accelerating it. A valid confirmation will take place when the price-action regularly confirms the double-top with the neckline breakout to the downside. Bullish Regular Divergence Ⅱ - Here is another divergence in which the price-action forms a reliable reversal-formation, in this case, a double-bottom which also can alone be the decisive factor for the final reversal, together then with the higher lows forming in the MACD it is a strong signal to reversing the trend into the bullish direction and similarly to the Bearish Regular Divergence Ⅱ it finally confirms with the neckline breakout by the established double-bottom with proper volume to the upside. __ Bearish Regular Divergence Ⅲ - This divergence has a good and appropriate application in the market formations to form. In this divergence, the price-actions form higher highs while the MACD forms lower lows signaling a bearish reversal to take place. A good confirmation occurs when the price-action closes below the lastly established lows and after that continues also further to form further bearish continuations, it can be a good point to spot the final reversal when the MACD looks like it develops the next lower high. Bullish Regular Divergence Ⅲ - This is the exact counterpart of the Bearish Regular Divergence Ⅲ while the price-action forms lower lows in the structure the MACD develops higher highs showing this given divergence and likely to indicate the bullish reversal to take place sooner or later. Additionally, a falling volume and momentum in the actual price-action will lead to more increased validations followed by an upcoming rise in volatility above previously lower highs, these structures and developments are always also important. _____ Hidden MACD Divergences: __ Bearish Hidden Divergence Ⅰ - This divergence is actually the counterpart to the Bearish Regular Divergence Ⅰ and in this case, the MACD also forms a double top in the structure however unlikely as in the Bearish Regular Divergence Ⅰ in this case the price-action forms lower highs in the structure showing the exceptional weakness of the bulls as the price-action does not manages to maintain further higher highs, this is why the formation is finally likely to confirm bearishly to the downside and the reversal took place. Bearish Hidden Divergence Ⅰ - In this divergence the MACD forms a double-bottom with both lows forming a lower baseline in the MACD-histogram structure while the price-action forms higher lows which is very important here as such a constellation is normally defined as bullish with the possibility to reverse, the double-bottom in the MACD then confirms the further bullishness to establish and likely bullish volatility to show up in the structure, the requirement is that the established uptrend-line does not invalidate to the downside. __ Bearish Hidden Divergence Ⅱ - The next divergence is forming a classical reversal-development with the formation of a double-top in the price-action as the two highs form a horizontal baseline where the price-action rejects while the MACD is developing higher highs in the structure. In this case, the final confirmation sets place when the price-action breaks out below the neckline of the double-top in the structure which is the set-up for the further continuations bearishly to the downside, the best is to wait on the final confirmation before considering moving into. Bullish Hidden Divergence Ⅱ - This classical bullish reversal-formation marks out the potential stopping of the downtrend with two lows building the baseline of a potential double-bottom while the MACD is establishing this lower low structure it is the proper further confirmational part to develop a sufficient bullish reversal which will finally take place when the price-action breaks out above the upper neckline of the double-bottom to complete it and show up with further continuations to the upside. __ Bearish Hidden Divergence Ⅲ - When the price-action forms lower highs that do not maintain new higher highs in an uptrend it is always a sign that the uptrend is struggling and that it is likely to reverse together then with the higher highs divergence in the MACD to form the final bearish reversal has a high possibility to emerge which will validate when price-action moves below the previous lows in the uptrend and continues to the south. Bullish Hidden Divergence Ⅲ - With this form the uptrend and the higher highs structure that developed in the price-action have a tendency to reverse as the MACD forms the lower lows in the structure signaling that the MACD is already doing the markdown that follows also in the price-action. In this case the final confirmation will take place with a breakout below the established ascending trend-line after which a bearish continuation will likely follow up. _____ Therefore moving through all these important different forms the MACD can be a substantial indicator for spotting reversals in the structure when done right. It is always necessary to maintain the objection to the current situation and further technical factors to apply the MACD-divergences rightly. In this manner, thank you everybody for watching, support the idea with a like and follow or comment, have a good day as well as weekend, and all the best to you! Information provided is only educational and should not be used to take action in the markets. _____
BYBIT:BTCUSD.PEducation
by VincePrince
20
Convergence & DivergenceOne of the important concepts that traders should understand is the difference between divergence and convergence, two terms that are often used interchangeably but have distinct meanings and implications for trading. Convergence refers to a situation where both the price of an asset and a technical indicator are moving in the same direction. For example, in a situation in which both the price of an asset and an indicator show an uptrend, there is a high probability that the trend will continue. So, here, the price and indicator CONVERGE (follow the same direction), and the trader may hesitate to trade in the opposite direction, as this is often seen as confirmation that the price movement is strong and likely to continue. Divergence refers to a situation where the price of an asset is moving in one direction while a technical indicator is moving in the opposite direction. For example, if we again consider the situation when the price of an asset shows an uptrend and, this time, the trend of a technical indicator is falling, there is a high probability of a trend reversal. So, here, the price and indicator DIVERGE (go in opposite directions). This is often seen as a warning sign that the price movement may not be sustainable and could soon reverse. To further understand the difference between convergence and divergence, let's look at some of the most commonly used technical indicators in trading: Relative Strength Index (RSI) RSI measures the strength of an asset by comparing the average gains and losses over a specified period of time. When the RSI value is above 70, it is considered overbought and is seen as likely to reverse soon. When the RSI value is below 30, it is considered oversold and is seen as likely to rebound. RSI Convergence RSI Divergence Moving Average Convergence Divergence (MACD) MACD measures the difference between two moving averages of an asset's price movements. Traders use the MACD to identify when bullish or bearish momentum is high. There is usually one short-term moving average and one long-term moving average. When the short-term moving average crosses above the long-term moving average, it is seen as a bullish signal, while a cross below the long-term moving average is seen as a bearish signal. MACD Convergence MACD Divergence Commodity Channel Index (CCI) CCI measures the difference between an asset's price change and its average price change. High positive readings indicate that the asset's price is above its average, which is seen as a bullish signal. Low negative readings indicate the asset's price is below its average, which is seen as a bearish signal. If the CCI value is above +100, this is seen as a signal of the start of an uptrend. If the CCI value is below -100, this is seen as a signal of the start of a downtrend. CCI Convergence CCI Divergence It is crucial to note that convergence and divergence are not guaranteed indicators of future price movements. Traders should use them in conjunction with other technical and fundamental analyses to aid their trading decisions. Traders should also be cautious of the fact that all indicators are lagging behind the current price action, and therefore they must be prepared to adjust their strategies accordingly. Trade safely and responsibly. BluetonaFX
Education
by BluetonaFX
4
📉 The "Death Cross" PatternDeath Cross, 5 Key things to watch The "death cross" is a market chart pattern that occurs when a short-term moving average falls below a long-term moving average, indicating recent price weakness. It is often studied using the 50-day and 200-day moving averages. The death cross pattern is more reliable when confirmed by other indicators such as high trading volume or momentum indicators like the MACD. These indicators can help confirm that a major trend change is occurring. 🟠 The Death Cross (convergence of moving averages) is a strong indication of a sell-off 🟠 If volume increases after the Death Cross, the downward trend is likely to strengthen 🟠 If price is above moving averages, strong volumes may be needed to suggest a turnaround 🟠 If price is below moving averages, the selling pressure is likely to be severe and any upward corrective moves will face strong resistance 🟠 The first sign of selling pressure weakens as moving averages start to turn upward 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, Please like, comment and follow ❤️
Education
by QuantVue
5
A Deep Dive Into The MACD1. Introduction The Moving Average Convergence Divergence (MACD) indicator created by Gerald Appel in 1979 (1) is part of the pantheon of technical indicators, being one of the most used and influential ever created. The popularity of the MACD allowed further studies and more varied applications of the indicator, from signal processing in neuroscience (2), prediction of hospitalizations (3)...etc. In this post, we will highlight extensive details, calculations, and usages of this legendary indicator. If you wanted to go beyond what you learned about the MACD, then this post is for you. Note that some contents of this post can be complex and might not suit certain readers, feel free to skip the sections of your choice. 2. Details This oscillator returns 3 time-series, the MACD, obtained from the difference between two exponential moving averages of different periods, a signal line, obtained from the exponential moving average of the MACD, and a histogram obtained from the difference between the MACD and the signal line. Each MACD component allows evaluating the current market trend direction, momentum, and acceleration. Many traders believe the amount of information the MACD can return is sufficient to be used as a standalone for both trend-following and contrarian trading. In terms of digital signal processing, the MACD can be classified as an infinite impulse response (IIR) bandpass filter, filtering out both lower and higher frequency components of a signal, thus having the ability to both detrend and smooth. The MACD filter satisfies the conditions for being a discreet time linear time-invariant (DLTI) system, it is linear and time-invariant: macd_(a + b) = macd_(a) + macd_(b) -> Additivity K × macd_(x) = macd_(K × x) -> Homogeneity macd_(x ) = macd_(x) -> Time Invariance 3. Calculation The MACD oscillator is obtained from the difference of two exponential moving averages (ExpMA), one using a faster period (often 12) and one using a slower period (often 26). MACD_ = ExpMA(price,fast) - ExpMA(price,slow) We can also obtain the MACD from the following difference equation: y = (price - price ) × g + ((1 - a1) + (1 - a2)) × y - (1 - a1) × (1 - a2) × y where a1 is the smoothing constant of the fast ExpMA, a2 the smoothing constant of the slow ExpMA, and g is the gain constant obtained from the difference between the smoothing constant of the two ExpMA's: g = a1 - a2 = 2/(fast+1) - 2/(slow+1) 4. Impulse Response The impulse response of the MACD is the result obtained by applying the MACD to a unit impulse signal, given by the Kronecker delta function d . d = 1 if t = 0, else 0 The impulse response fully describes the properties of the MACD and can be obtained from the difference between the impulse response of two ema's with periods fast and slow . The impulse response of an exponential moving average h(ExpMA) over time t with smoothing constant a is given by: h(ExpMA) = a × (1 - a)^t As such for the impulse response of the MACD h(MACD) over time t we obtain: h(MACD_) = a1 × (1 - a1)^t - a2 × (1 - a2)^t Like with an exponential moving average, the impulse response of the MACD does not become steady, instead continuing indefinitely, hence why it is classified as an infinite impulse response filter. 5. Frequency Response The frequency response of filters allows us to determine how they affect the frequency content of a signal. The frequency response can be directly obtained from the discrete-time Fourier transform (DTFT) of the impulse response, which for the MACD returns: H(e^iw) = SUM h × e^-iwn, for n = 0 to ∞ = SUM (a1 × (1 - a1)^n - a2 × (1 - a2)^n) × e^-iwn with w = 2 × pi × f . The infinite sum makes its direct computation infeasible. It is generally more common to evaluate the filter transfer function H(e^iw) obtained from the Z transform given by: A(iw) = b + b × z^-iw + ... + b × z^-iwP ------------------------------------------------- B(iw) = a + a × z^-iw + ... + a × z^-iwQ With feed-forward coefficient b and feedback coefficients a . This transfer function assumes a filter of the form: y = SUM b × x - SUM a × y , for p = 0 to P & for q = 1 to Q This is the reverse ordering used by the MACD difference equation previously described, as such the MACD transfer function is given by: g + -g × z^-iw ---------------------------------------------------------- 1 + × z^-iw + × z^-iw2 The frequency response is then obtained by evaluating the above transfer function for z = e . 5.1 Magnitude Response The magnitude response describes how a filter attenuates the amplitude of the frequencies composing a signal. It is obtained from the absolute value of the transfer function |H(e^iw)| , that is: |H(e^iw)| = sqrt(Real ^2 + Imag ^2) For the MACD we obtain the closed-form solution: sqrt(g^2 × sin(2 × pi × f)^2 + (g - g × cos(2 × pi × f))^2) |H(f)| = ---------------------------------------------------------------------------------------------------------- sqrt( ^2 + ^2) with A1 = (a1 - 1) + (a2 - 1) and A2 = (a1 - 1) × (a2 - 1) . In the previous figure we can see the magnitude response of the MACD using fast = 12 and slow = 26 . This magnitude response is asymmetric, we can see attenuation of lower frequency components, and a poor attenuation of high-frequency components. The above figure shows various MACD magnitude responses for various configurations of the fast and slow settings. We can see on the left that a fast period closer to the slow period return magnitude responses with fatter tails as well as a decreasing resonant frequency (frequency where the filter returns the least attenuation), on the right, we can see how increasing the slow period returns a lower attenuation of the peak frequency. 6. Usage The MACD has known a wide variety of usages amongst traders, extending from trend-following to contrarian methodologies. The most basic usage of the MACD is given by evaluating the sign of the MACD, with a positive sign (fast ExpMa > slow ExpMA) indicating an uptrend and a negative sign (fast ExpMa < slow ExpMA) indicating a downtrend. We can see that this usage does not differ from the one given by a simple MA cross strategy. The user might also suffer from the excessive lag produced by this simplistic approach. The strength of the indicator can come from the usage of the MACD with the signal line and histogram. A timelier approach would identify an uptrend when the MACD is above its signal line (histogram above 0) and a downtrend when the MACD is under the signal line (histogram under 0). This approach makes better use of the leading characteristic of the MACD oscillator, thus offering more predictive insights. However, an increment in timing does not come at no cost, with the more recurrent of whipsaw trades. Notice in the image above how the usage of the MACD with the signal line allows for a faster trend detection compared to using the MACD alone. We can also see how this usage of the indicator is more sensitive to shorter-term price variations, inducing potential whipsaw trades. This is caused by the common tendencies that oscillators have to increase the presence of noise in an input series. It is also possible to use a combination of both usages in order to avoid their disadvantages, for example opening trades based on the sign of the MACD while exiting trades when the MACD crosses the signal line. However, the main disadvantage of using the histogram can appear when the user must optimize indicator settings, with a usage based only on the MACD meaning that two settings would need to be optimized, while usage based on the histogram would mean optimizing three settings, which is computationally more expensive. 6.1 Divergences Divergences are commonly used with oscillators. A divergence occurs when the price tops/bottoms and MACD tops/bottoms are negatively correlated. This can indicate a trend impulse of lower amplitude, which could highlight a potential reversal. 6.2 Fast > Slow Period MACD The MACD already possesses some leading characteristics, allowing to anticipate turning points. However, the ability of the MACD to provide signals anticipating future trends mostly depends on the current market conditions, with certain price variations complicating the leading ability of the MACD. The predictive abilities of the MACD can be improved using a fast period higher than the slow period. Assuming the user uses the histogram of the MACD, cyclical variations within a price trend will generally prove to be problematic if the signal length excessively delays the MACD. Inverting the fast and slow period can help signal early reversal, instead of suffering from the excessive delay introduced by the histogram. The practice of inverting MACD fast and slow period was proposed by Ehlers (4), we can also see that optimizing MACD settings in mean reverting markets can tend to return fast periods higher than slow periods. We can see that such an approach is directed toward contrarian traders. 7. MACD Using Different Type of Moving Averages The MACD uses exponential for the calculation of the fast, slow, and signal moving averages by default, however different types of moving averages can be used. The MACD would directly inherit the characteristics of the type of moving average used, thus improving characteristics such as reactivity and smoothness. For example, certain users prefer using the simple moving average, returning slightly lower reactive MACD with a slightly higher degree of filtering. Using low lag moving averages would return a very reactive MACD, with a histogram able to anticipate MACD turning points due to the ability of low lag moving averages to over/undershoot the input signal. Notice in the above chart how the MACD based on the Hull moving average (bottom) is more reactive than a regular MACD (top) with equal settings. Also, notice how the signal line is able to exceed the MACD before the occurrence of its turning point. However, it can be more interesting to use more than one kind of moving averages for the MACD calculation, using a type of moving average that is suitable for each MACD component. As such it would be more interesting to have a low lag moving average as fast-moving average, and a more classical one as slow and signal moving average. References (1) Appel, Gerald. "Technical Analysis Power Tools for Active Investors." Financial Times Prentice Hall. p. 166 (2005) (2) Durantin, Gautier, et al. "Moving Average Convergence Divergence filter preprocessing for real-time event-related peak activity onset detection: Application to fNIRS signals." 2014 36th Annual International Conference of the IEEE Engineering in Medicine and Biology Society. IEEE, 2014. (3) Zhang, Jufen, et al. "Predicting hospitalization due to worsening heart failure using daily weight measurement: analysis of the Trans‐European Network‐Home‐Care Management System (TEN‐HMS) study." European journal of heart failure 11.4 (2009): 420-427. (4) Ehlers, John F. "The MACD Indicator Revisited." (1991).
COINBASE:ETHUSDEducation
by LuxAlgo
22
Testing My Forex Trading Strategy My technique that i used to determine whether to buy or sell a currency pair at any given time. that technique is based on three Fondamental Points : CCI (convergence /divergence) Tops / Bottoms Trendline Fibo retracement. For thiis pair , we expacet an strong bearish to dwon level for next weeks approx (3-4 months) So Lets see the result by testing this time with EUR NZD For more information how to learn this method ,you can inbox me at any time
Education
by winerstep
2
The MACD explained ! All you need to know about it Hello everyone, as we all know the market action discounts everything :) _________________________________Make sure to Like and Follow if you like the idea_________________________________ In this video, I am gonna explain what is the MACD and how to use it and how to identify buy and sell signals using this indicator. So what is the MACD, The MACD is a trend-following momentum indicator (so a momentum indicator is a technical analysis tool that allows us to determine the strength or weakness of a stock's price movement ) There are a lot of people that use the MACD when they analyze charts because it's very simple and it's very good but I always say never just use 1 indicator to analyze a chart, always try to use at least 3 this way u can make sure that the result is more accurate and the market most likely to move as u analyzed. let's look at the theory behind the MACD before looking at a real-life example and how to identify buy and sell signals using this indicator : The typical settings for the MACD are 12 26 and 9. The MACD consist of 4 parts : 1) Zero line 2) MACD line 3) Signal line 4) Histogram We start off with our zero line and this is where the MACD line and the signal line move around and basically so if the MACD is trading above the 0 line then it's bullish and if it's under then it's bearish. Then we have the MACD line and it comes from the 12 26 section, and it gets calculated by subtracting the 26 EMA of the price out of the 12 day EMA of the price. And after that we have a second line that gets plotted from the 9 section so basically, it’s a moving average for the MACD line so it tries to smooth the MACD line and give us some signals and it's called the signal line.(it's called a signal line because that's where we get our buy and sell signals from) So on top of that, we have another part in this indicator which is called the histogram. So this histogram job is to show how close these lines will crossover, so when the distance between the MACD line and the signal line is far the histogram gets bigger and bigger. So how do we use this indicator : 1) Crossovers between the MACD line and the Signal line. * When the MACD line crosses above the Signal line then its a buy signal (Bullish Crossover) * When the MACD line crosses below the Signal line then its a sell signal (Bearish Crossover) 2) The Histogram . A lot of people use histograms as a way to predict when a reversal will occur. We know that the MACD is a momentum indicator so it can show us when sell pressure is low. And that means it might be a good time to buy. And It can tell you when your long position is about to run out of steam and when you should exit. 3) Divergences between the MACD and the Market Price . A Divergence means that the indicator is not moving in sync with the Market Price and a Reversal could happen (Note that Reversal trading is risky so please calculate your risks before using this Strategy) always remember that : Bullish divergence is when the Market price is going down but the MACD is going up. Bearish divergence is when the Market Price is going up but the MACD is going down. I hope I’ve made the MACD easy for you to understand and please ask if you have any questions . Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts and The RSI. links will be bellow
COINBASE:BTCUSDEducation
by GabiDahduh
18
Trading with convergence to increase your probabilityTaking a look at the price action on EURJPY currently, we have seen a potential selling opportunity setup. Why we like this setup is because it holds a few factors that all converge together. As traders the higher the amount of information we have to help make an informed decision the better. As you can see from the 15 Minute chart, we firstly have price move quite rapidly higher until it starts to run out of steam and show signs of price exhaustion, we can also see this through the creation of a bearish 3 drive pattern at the highs. This pattern is a good indicator for potential reversal when used in the right context. What increases the probability on this particular setup is that this exhaustion also occurs at the 126.00 big figure as this level could also hold larger pockets of order flow and help price to reject lower. As traders we don't know exactly how far price can move but what we can do is locate areas or levels on a chart that could cause a possible bounce or rejection in our favor. It's in these moves that we can look to potentially manage a trade profitably in the process.
Education
by DavidVillagra
Algorithm Builder : Please ask me if you're stuckHi everyone A quick post to share a story that happened less than 20 min ago. I received feedback that a follower didn't want to buy the Algorithm Builder because he "tried it and it doesn't work on the Indian market" 11 minutes later (see screenshot below), using the exact same Strategy Builder along with the Backtest (that I'll introduce tomorrow), I made him a strategy with a stunning 63% win-rate, 3 Profit factor - on a period of 10 days, ending today Our chat imgur.com Performance of the algorithm across the last 10 days on a market not very volatile: imgur.com I'm not writing this for trolling, I don't care at all and I surely have better use of my time I just want to convey a message that if you don't know/understand how to use my Algorithm Builder, please ask me. I won't bite and I'll even advice configs People are asking me every what I do use for trading and if I use the scripts I share... short answer: YES and the main pinnacle of my trading is the Algorithm Builder. I make every day for my clients any algorithm on any market, any timeframe in less than 15 minutes. Now some of my clients got even better than me at designing signals with the tools.... (I'm a bit pissed about that, to be honest, but so happy they're learning) You'll be able as well with a bit of practice, it's honestly not hard. Even my sister is doing it and she doesn't even know what the indicators inside mean... I'm here to help so shoot me your questions/concerns/feedback. I can't guarantee your success on the financial markets because psychology plays still a huge part but I did this in 11 minutes guys and you already have the tool available for a free week trial This is a generic script to detect the confluence/convergence between unrelated indicators Algorithm Builder More on that tomorrow to come, my friends. Dave
NSE:NIFTYEducation
by Daveatt