What is the MACD indicator top deviation pattern?
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Times Source: Top Financial Writer: Stock Market Sniper -Small +Large
What is the MACD indicator top deviation pattern?
When it comes to the MACD indicator, I believe many investors know that it is a trend indicator, which is called the average of exponential smoothing differences and similarities.
The top deviation of MACD index is a common analysis method in stock technical analysis. The top deviation refers to that when the stock price trend on the K line chart is higher than the peak, the stock price is rising all the time, while the trend of the graph composed of red columns on the MACD index graph is lower than the peak, that is, when the high point of the stock price is higher than the previous high point However, the peak of MACD index is lower than the previous peak of the index, which is called top deviation phenomenon.
According to the position where the stock price appears, it can be divided into top deviation and bottom deviation. There are different deviations in the bottom and top regional markets.
The main ways of deviation are as follows:
The resultant force direction deviates from the running direction;
Deviation between velocity and acceleration;
What is embodied between quantity and price is the deviation between quantity and price;
What is embodied between time and space is space-time exchange and space-time resonance;
What is reflected between time and price is that the price stops and time continues;
The deviation between the resultant force direction and the running direction and the deviation between the speed and acceleration are two deviations that must occur at every turning point.
Therefore, before the stock price turns, one of the deviations mentioned above will inevitably occur. What investors are most familiar with is the deviation between volume and price. If, at the end of the downtrend, the stock price falls to a new low, but the trading volume (or volume index) does not reach a new low, the bottom deviation will occur. If at the high level of the rising trend, the trading volume (or capacity indicator) does not reach a new high, but the stock price continues to reach a new high due to the inertia principle, but the stock price falls back or falls due to the lack of strong support from capacity, this phenomenon is called top deviation.
When the stock price trend on the K line chart is higher than the peak, the stock price is rising all the time, while the trend of the graph composed of red columns on the MACD indicator chart is lower than the peak, that is, when the high point of the stock price is higher than the previous high point, and the high point of the MACD indicator is lower than the previous high point of the indicator, this is called top deviation phenomenon. The phenomenon of top deviation is generally a signal that the stock price is about to reverse at a high level, indicating that the stock price is about to fall in the short term, which is a signal to sell stocks. (Shareholders College: http://www.58188.com )
Practical Skills
The deviation of MACD index at the top is the way to escape the top. Generally speaking, it is not urgent to copy the bottom, and you need speed to escape from the top. According to this statement, when MACD shows signs of deviation at a high level, what we need to do is to quickly withdraw and close the position, regardless of how much profit it will make later.
But sometimes we notice that after the MACD indicator deviates from the current peak of the stock price, the stock price does not reach the peak immediately. The MACD is going down, and the stock price is still slightly up. This situation can only be seen as an incentive behavior of the main force.
Key points of operation:
1. The bottom deviation pattern of MACD column is often prior to the bottom deviation pattern of DEA curve. According to the bottom deviation pattern of MACD indicators, investors can buy stocks at the bottom earlier, but they also need to pay more attention to risk control.
2. If the trading volume gradually shrinks when the MACD column deviates from the stock price bottom, and the trading volume gradually increases when the stock price bottoms out and rebounds in the future, it indicates that the power of the short side declines and the power of many parties increases. This form of bullish signals will be more reliable.
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