The MACD Divergence foreign exchange strategy is the completely trustworthy systems and is established on the standard MACD indicator. Indeed, the divergence in the midst of MACD line and the currency pair ratio is the fundamental signal in this strategy. This system has moderately fluffy entry and exit points, but it’s simple to mark the signal and exchanges can be slightly profitable, as it assists to achieve the pull-backs and trend adjustments.
- Simple to mark signals.
- One and only standard indicators utilized.
- Satisfying gain potential on positions.
- Take-gain and stop-loss levels are fairly indefinite.
- Unique occurrence on the long-term diagrams.
The Strategy Establishment
- All currency pair and lapse of time should work. But shorter time spans are highly recommended, as they produce more opportunities.
- Include MACD (Moving Average convergence/Divergence) indicator to the diagram, establish fast EMA timeframe to 12, slow EMA timeframe to 26 and MACD SMA to 9; employ to close.
The Entry Conditions
Introduce long position when the cost displaying a bluff trend and MACD indicator displaying a vigorous trend.
Introduce short position when the cost indicates a bluff trend and MACD indicator displaying a vigorous trend.
The Exit Conditions
Introduce stop-loss to the neighboring support level, when moving long, or to the neighboring resistance level, when moving short.
Introduce take-gain to the nearby resistance level for long positions, or to the nearby support level for short positions.
The instance diagram is EUR/USD currency pair at M15 time span. As illustrated on the diagram, the price line was decreasing in a bluff trend, while the MACD indicator was increasing in a vigorous trend throughout fairly long timeframe. The entry point is notable at the level, where it’s demonstrating evidently that the downtrend is above on the currency pair diagram. Stop-loss was established to the support level created by the double-bottom diagram design, while the take-gain was established to the level of resistance created by bluff trend’s short lived pull-backs. The TP/SL proportion is fairly superb here – around 1.5.
Utilize this strategy at your own risk. WindsorForex.com can’t be responsible for any losses associated with using any strategy presented on the site. It’s not recommended to use this strategy on the real account without testing it on demo first.