MACD Regular and Hidden Divergence Indicator
Moving Average Convergence Divergence Indicator - trend-following dynamic indicator. MACD Divergence in other words moving average convergence divergence indicator is modern indicator with complex mathematic algorithm (BJF Trading Group innovation). You will see divergenses on the chart and indicator. Arrows painted above/below the open bar and not in the past. You can see when actually you can trade. It is never to late! Signals based on closed bars so the arrows above/below open bar never disappear.
MACD Divergence indicates fractal moving average convergence divergence. When divergence appears between MACD and the price, it indicates a high probability that the current trend will finish soon. A signal to buy is when a new Down-fractal is formed below the previous one and a corresponding MACD value is higher than the previous one. A signal to sell is when a new Up-fractal is formed above the previous one and a corresponding MACD value is lower than the previous value. The MACD Divergence indicator has a lot of customizable settings.
Hidden bullish divergence happens when price is making a higher low, but the oscillator is showing a lower low .
This can be seen when the pair is in an uptrend. Once price makes a higher low, look and see if the oscillator does the same. If it doesn't and makes a lower low, then we've got some hidden divergence.
Hidden bearish divergence, when price makes a lower high, but the oscillator is making a higher high. This occurs in a downtrend. When you see hidden bearish divergence, chances are that the pair will continue to shoot lower and continue the downtrend.