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This signal was created by
Eric Lefort, the famous French author and trader. This
signal enables to take position when a divergence is
detected between close prices and the MACD indicator.
|Category||: Trend reversal or trend resumption|
|Components||: MACD technical analysis
|Time frame(s)||: All
|Usable for buy signals||: Yes
|Usable for short sell signals||: Yes
|Normal bullish divergence||: Inverted bullish divergence|
|Normal bearish divergence||: Inverted bearish divergence|
|StartTime||: Start of the period of activation of the signal (e.g.: 900 for 9 a.m.)|
|EndTime||: End of the period of
activation of the signal (e.g.: 1845 for 18.45 p.m.)
|MessageBox||: 1 = send a message when a signal appears|
|PlaySound||: 1 = play a sound when a signal appears|
|SendEmail||: 1 = send an email when a signal appears|
|EMAfast||: Number of periods for the fast Exponential Moving Average|
|EMAslow||: Number of periods for the slow Exponential Moving Average|
|EMA||: Number of periods for the MACD signal line|
|smoothH||: Width (in candles) of the quote highs|
|smoothL||: Width (in candles) of the quote lows|
|ONone1Normal2Inverse3All||: 0 = no divergence, 1 = normal divergence, 2 = inverted divergence, 3 = all divergences|
|DistanceMaxH||: Maximum number of bars between two highs|
|DistanceMaxL||: Maximum number of bars between two lows|
|DifferEntry||: Entry delayed by the selected number of bars|
|StrengtRepulsionTicks||: Optional filter: minimum strength of the signal required, expressed in ticks above the low (or below the high), to validate the signal.|
It depends on the situation. An illustration of each of the four cases is presented below. Please note that the trend line on the MACD chart is in dark red and the signal’s direction is indicated by a green spike:
Classic bearish divergence
A sell signal will appear if the quotes give a new high,
which is higher than the previous high, whilst the MACD
gives a new high, which is less high than the previous
This situation indicates that the bullish trend is weakening, making it a good time to close a long position or to take a short position against the trend.
Classic bullish divergence
A buy signal will appear if quotes give a new low, which
is lower than the previous low, whilst MACD gives a new
low, which is less low than the previous low.
This situation indicates that the bearish trend is weakening, making it a good time to close a short position or to take a long position against the trend.
Inverted bearish divergence
Inverted divergences indicate an opportunity to enter a
current trend, either to strengthen an existing position
or to take advantage of a new impulse.
A sell signal appears if quotes give a new high, which is less high than the previous high, whilst the MACD gives a new high which is higher than the previous high.
This situation potentially announces a new bearish impulse of quotes.
Inverted bullish divergence
A buy signal appears if quotes give a new low, which is
less slow than the previous low, whilst the MACD gives a
new low, which is lower than the previous low.
This situation potentially announces a new bullish impulse of quotes.