MACD Divergence

[smallcap]

I would like to ask people's ideas and opinions on the use of MACD and MACD Divergence in trading.

 

[Bladerunner]

Investopedia.com Search Results

Search - StockCharts.com

Andy

 

[ZEPPO]

I would like to ask people's ideas and opinions on the use of MACD and MACD Divergence in trading.

Visit the following links:

MACD Histogram Divergence
Traders' Consortium

Eduardo.

 

[Bladerunner]

I would like to ask people's ideas and opinions on the use of MACD and MACD Divergence in trading.

Hi

Its very ok but its just an indicator, no need to pay for any fancy ones, standard one is just fine. Learn it inside out if you like the look of it.

A sharp shooter does not need to keep re-setting his or her sights, just aims off centre in a strong wind

A bad workman blames his tools.

Andy

 

[smallcap]

Thanks Bladerunner & Zeppo.
I have plenty of websites to look at - I was really after anyone's personal ideas and opinions
Thanks for replying.

 

[bbmac]

http://www.trade2win.com/boards/forex-first-steps/28967-divergence-indicators-5.html#post484245

See post no.44 as an example, middle oscillator is the macd.

there is no question that macd divergence can be useful if used at areas of support/resistance etc..

 

[dojispace]

I don't normally use macd divergence, I use stochastic divergence. When they occur, they are strong leading indicators.

 

[rtsurvivor]

Hi Smallcap. I'm a big fan of the MACD. I use it as a qualifier for a lot of different price patterns. the pic below shows the EUR/USD daily as a good example of how the MACD could be used to catch a coming drop or end of an up trend around last June or so.

I have a couple of other indicators that are qualifiers for price patterns but again, the MACD ranks high on my list.

Good trading
RT... :clover:

 

[mr_cassandra]

I think divergence can be a useful tool as long as you understand the built-in flaw to all oscillators. They have all been time-tested to a generic 'best-fit' number setting and they 'diverge' if ""your"" index/stock has a move shorter or longer than the best-fit setting.
What does this mean to you? Let's say you apply a 12-26 macd to stock XYX and XYZ then proceeds into a 45 day ascent. At about 25 days they macd will begin to show you negative divergence and if you weren't aware of this limitation, you might begin reversing position on a stock that is going up another couple weeks.

 

[HaloTrader]

...so?

 

[jonboy123]

can divergence happen with macd histogram and macd line?

eg histogram sloping down... and macd line going up...? is this divergence ?

stockcharts.com article i think suggest this, but they dont explicity say.
can anyone confirm please.

cheers.

 

[Blaiserboy]

Here is a macd indicator for metatrader with alerts, it may be handy for someone.

 

[ajay]

Dear Friends,

This is a small attempt from my side towards contributing to the common sense approach in indicator interpretation. Here is the ppt file that I zipped and attached.

Please correct me if I am wrong.

Happy practicing technicals

Ajaya

 

[jonboy123]

Dear Friends,

This is a small attempt from my side towards contributing to the common sense approach in indicator interpretation.

Please correct me if I am wrong.

Happy practicing technicals

Ajaya

whats in the zip file?

 

[ajay]

It is a ppt file in zip format.

 

[jonboy123]

whats a ppt file?

 

[Blaiserboy]

a setting that I use on a 5 minute chart is 7 10 5

 

[maiden22]

Lots of people seem to like it. Treat it as a tool or support, not as the trigger.

 

[Blaiserboy]

Depending on the trend. I have found that when the Macd histogram crosses on the higher tf........ often there are good entries on the lower.

Definitely not to use the Macd divergence as a trigger... or account balance will quickly disappear.... sometimes there is Macd divergence for months and months before a change in direction. We have to use price action for entries, divergence is just an indicator.

 

[ajay]

Hi Friends,
I sincerely apologize for not bringing in price action - into the MACD presentation - to take trading decision.

All my presentation went on discussing only scenario behind the happening of the divergence. It is silent on trade initiation part.

As maiden22 and Blaiserboy mentioned, trade trigger should be price action and not MACD divergence.

Thanks maiden22 and Blaiserboy

Happy Practicing Technicals

Ajaya