MACD divergence - anyone use it, thoughts?

A chat room I use while I’m trading has a MACD divergence guy in now and I wanted to know people’s thoughts. I don’t use it myself and have found some people saying that it looses more than it wins.

Wondering what everyone else’s experiences are?

I would not recommend trading divergence as the only indicator. I would look to confirm it with price action itself.

The MACD is one of the more reliable indicators yet it struggles to reach a success rate of 50%.

If you are going to use the MACD, you really need to read and study the book…“Technical Analysis - Power Tools for Active Investors” by the inventor of the MACD himself, Gerald Appel.

There is a lot more to the MACD than I have ever seen posted on this forum or any other forum.

From the demo video I saw it looked quite simple. I don’t generally rely on indicators like MACD myself but I was intrigued because of how simple it appeared to be.

I think this may be the correct approach as I have seen divergences take a long time to result in a trend change… and mistakes can be made…

I like to see a reversal pattern in the price bars or candles before making an entry.

That being said… a macd divergence can serve as a very useful warning of an impending change.

To me, a three point macd divergence is a strong indication… however… macd divergence does not always appear in a trend change… similarly with other oscillator divergences, none of them is 100 percent.

i trade on naked chart
a lot of time i can buy when the stochastic or macd is overbought and sell when is oversold and overall i had been always much profitable than other traders i know with a lot of lines and colors on their chart

With MACD the right approach seems to be having a confluence over lower and higher timeframes. A negative divergence on the 4H would be ignored if there was a positive divergence on the 1H… Signals only work when common sense is also applied.

if you have stochastics and macd on chart… I would think that is not a naked chart…

i don’t have macd and stoch on my chart but sometimes i look at they, not to adjust my trades but only for curiosity :stuck_out_tongue:

well, keep in mind that when stoch is in overbought or oversold… does not always mean that price is about to change direction

is what i said :slight_smile: