Trading strategy on MACD divergence

Only the MACD indicator with standard parameters and the concept of divergenceThe difference in the readings of the indicator and the price chart.

Marketplace: ;
IndicatorsMACD.
Timeframe: various, high;
Currency pair: EURJPY, EURUSD, GBPUSD, USDJPY;
Strategy: intraday;
Protective orders: StopLoss, TakeProfit, TrallingStop, Breakeven.

Trading Strategy Signals on MACD Divergence

As signals for buying and selling we will use Bullish and bearish divergencesThat is, the points at which a trend change and trend reversal are possible.

Bullish MACD Divergence

Having seen a bullish divergence on the chart, you must wait until MACD indicator will fall below its signal line. And immediately at the opening of the next candle you should make a deal to sell the instrument you are trading.

StopLoss The StopLoss value is set at ~10 points above the previous maximum and is taken as N (see Fig. 1).

When the price passes by the value N in the direction of our trade, StopLoss is moved to breakeven point (see Fig. 2).

After passing 2N, StopLoss from the breakeven point is moved down by the value of N (see Fig. 3), and TakeProfit is set at 3N from the position opening point (see Fig. 4).

MACD bearish divergence

Similar to the previous signal, when a bearish divergence is formed, it is necessary to wait for MACD indicator will rise above its signal line, and at the opening of the next candle you should make a deal to buy the instrument you are trading.

StopLoss in this case it is also set ~10 points below the previous minimum, and the StopLoss value is taken as N (see Fig. 1).

When the price passes by the value N in the direction of our trade, StopLoss is moved to breakeven point (see Fig. 2).

After passing 2N, StopLoss from the breakeven point is moved up by the value N (see Fig. 3), and TakeProfit is set at 3N from the position opening point (see Fig. 4).

As a trading instrument you can choose one or more currency pairs with different timeframes (hourly/4-hourly/weekly charts). This strategy has proven especially good when trading the following currency pairs on the hourly chart - EurJpy, EurUsd, GbpUsd, UsdJpy.