Understanding "MACD" by Iwamoto Maxim: Part 4 [Max Iwamoto]
Max Iwamoto Profile
Keisuke Iwamoto. As his nickname “Midnight-Grade Technical Analyst” suggests, he is a rare case in the analyst industry with no formal education. Even in these days where the credential-focused society remains strong, he relentlessly engages with the FX market, where such background doesn’t matter. With the belief that “now that anyone can start FX easily, I want you to acquire techniques that allow you to keep winning steadily,” he serves as a serial author and seminar lecturer.
*This article is a reprint/edit of an article from FX Survival.com’s June 2018 issue. Please note that the market information written in the body is different from the current market.
Divergence is a Useful Trading Signal
Up to now, we have discussed the charm and practical application of MACD—from basics to applications, and from the advantages to the disadvantages of each signal. In this fourth installment, we will explain another MACD trading signal: “Divergence.”
Divergence refers to the phenomenon where the price and oscillator indicators move in opposite directions in the high-price or low-price area, and the trend subsequently reverses. This divergence is famous as a trend reversal signal confirmed by oscillator indicators such as RSI and Stochastics, but it is by no means limited to these two indicators. It is also a useful trading signal confirmed in other oscillator indicators, and in MACD, a leading representative of trend indicators.
