Trading as a Business by Dick Diamond

Trading as a Business by Dick Diamond

Author:Dick Diamond
Language: eng
Format: epub
ISBN: 9781118726846
Publisher: Wiley
Published: 2015-01-20T00:00:00+00:00


Figure 4.5 MACD Bearish Divergence

A word of caution about divergences in strong trending markets: When a new trend begins with a very strong initial move, it's quite possible that the next move in the direction of the trend will be more muted—and will generate a divergence signal. In those situations, pay attention to the signal line: as long as it's above the zero line in an uptrend and below the zero line in a downtrend, it's telling you that the momentum is still in favor of the underlying trend. Generally, in a strong trend, it's less risky and more rewarding to trade divergences in the direction of the trend.



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