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Technical Analysis - MACD Divergence

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Uploaded by on Jan 20, 2008

The correct way to identify a Divergence and correctly draw divergence trendlines.

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Howto & Style

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Standard YouTube License

  • likes, 4 dislikes

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  • Hello J, how come in other youtube videos, they are drawing the lines onto the MACD histogram and not the MACD signal lines?

  • thank you basedgod swagg

  • About Divergence any indicator will diverge from price because the indicators are fixed mathematical formula's. Price have no fixed value, price can keep going higher and higher or lower and lower.

    i would sugest only use indicators if u fully understand price action. Use the indicators with price action for additional confirmation.

    However i am saying not learn divergence but to learn price action first and keep it very simple.

  • Should you not point out that divergence often gives misleading signals, it may not indicate a change in the trend, just a slowing in the momentum of an existing trend-MACD's are weak indicators, that are only useful to a trader when used in conjuction with other technical and fundamenta factors.

  • @VikiSil I would say you are correct , because most of time when the macd crosses over or under the zero when the stock is in a trend it is more then likey the price is crossing over a trend line. The zero line cross, is indicating a (possible), chance of a trend reversal. It is more bullish when the macd does a bullish cross over the zero, vs a bullish cross under the zero.

  • Well made video, but I believe there are better indicators and methods to use in trading. It's just my opinion, I could be wrong.

  • Hey, isn't it that if the MACD crosses the zero line and then comes back up again for the lower high, the divergence does not count any more? I was taught that there is a true MACD divergence only if both highs or both lows are consecutive, without MACD zeroing out.

  • This video is ok but can't give you any insight how to enter trade. With just MACD you may be wrong in entering any trade. I agree with DISSALINED1. you have to make sure with ADX ,+D1 ,-D1 and RSI to confirm the trend. once divergence is spotted may be ride with the trade trend but tight stop because retracement is about to come. watch lower light. once ADX gives signal , close the posittion and go again with the retracement trend but tight stop. you can scalp both ways.

  • wow great video, thank you that was really helpful

  • Is this a Russian MACD?

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