Trading Strategy with MACD divergence

Forex Trading Strategy with MACD divergence - one of very reliable systems based on standard indicator MACD. And, to be exact, then the divergence between the line and the MACD line price on the chart. This system has a rather vague entry and exit points, but the signals are easily identified and positions can be quite profitable, as the strategy helps to catch rollbacks and trend reversals.

Features

• It is easy to detect signals.
• Uses only one standard indicator.
• A good profit potential.
• Levels of take-profit and stop-loss rather vague.
• The signals are seldom seen on the long-term charts.

Preparations for the trade

1. Any currency pair and timeframe, but the recommended short-term timeframes.
2. Add the indicator MACD (Moving Average Convergence / Divergence) in the chart, setting a period of rapid EMA 12, Slow - 26 and MACD SMA - to 9 apply to the closing.

Conditions of entry

• Enter into a long position when price shows a bearish trend, the indicator MACD - bullish.
• Enter a short position when the price indicates a bullish trend, the indicator MACD - Bearish.

Conditions of Release

• Set stop loss at a nearby support level (for long positions) or to a nearby level of resistance (for short).
• Take-profit set to the next level of resistance (for long positions) or to the next level of support (for short).

Example

Schedule an example is made on the basis of the EUR / USD on 15-minute timeframe. As the graph shows, the line falls in the prices a bearish trend, while the MACD is increasing in the bull market for quite a long period. The entry point is marked at the level where it was already clear that the falling trend ends on the chart. Stop-loss was set at the level of support, formed the figure of "double bottom", and the profit target was set at the level of resistance, formed by short rollbacks in a bearish trend. Ratio of profit to a loss turns out very good - about 1.5.

Attention!

Use this strategy at your own risk. EarnForex.com not responsible for any damages that may result to you when using any strategy presented on the site. It is not recommended to use this strategy on a real account without testing it to start a demo account.