I recently learnt the value of divergence in timing the gold market change of trends. I hadn’t paid much attention to the massive positive divergence in the MACD as the gold price continued to fall in December. I was tossed off my long position when gold dived yet again, but if I had bothered to look at the MACD it was rising.
My recent studies have taught me this is one of the most powerful indicators of an immanent change of trend. If I had known this a month ago I would have had the guts to hold my position and ride the new low in gold. I have learnt that the most powerful signal of an approaching change of trend is a reversal of the MACD indicator before a reversal of price. As I mentioned recently, there were multiple divergences showing up on the gold price indicators. If only I had noted their significance in time.
Below is an example of what I am talking about. I trust you too will respect these positive and negative divergences from the price trend in the future like i will.