MACD Divergence — By Steve Hill, AIQ Systems

Spot the Reversal Before It's Obvious.

Master the high-probability reversal patterns professional traders use to identify trend exhaustion before the crowd sees it — all four divergence types, six fully annotated case studies, and a complete trading framework.

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MACD Divergence — A Comprehensive Guide, book cover
Why This Guide

Most Traders Use MACD for Crossovers. The Real Edge Is in Divergence.

4 Types of Divergence

Regular bullish & bearish divergence for reversals, plus hidden divergence for trend-continuation trades.

Real Chart Examples

6 detailed examples from NVDA, META, SPY, AAPL, MSFT, and AMZN showing exactly how divergence predicted major moves.

Double Top/Bottom Patterns

The powerful combination of MACD divergence with classic reversal patterns for the highest-probability setups.

Complete Trading Framework

Step-by-step workflow for identifying, confirming, and trading divergence with proper risk management.

Entry & Exit Strategies

Aggressive, conservative, and scaled entry approaches with specific stop placement and profit-target guidelines.

Platform-Ready Instructions

Detailed setup guides for recreating every chart example on your own trading platform.

Inside the Book

Master These Four Powerful Patterns.

01

Regular Bullish Divergence

What it signals: potential trend reversal from downtrend to uptrend — price makes a lower low while MACD makes a higher low.

Trading strategy: enter long when MACD crosses above the signal line after divergence confirmation. Place stops below the most recent swing low.

Pro tip: works best at significant support levels or after extended downtrends. Wait for volume confirmation on the reversal.
02

Regular Bearish Divergence

What it signals: potential trend reversal from uptrend to downtrend — price makes a higher high while MACD makes a lower high.

Trading strategy: enter short when MACD crosses below the signal line after divergence forms. Place stops above the most recent swing high.

Pro tip: particularly powerful when combined with double-top patterns at resistance. The NVDA example in the guide showed a 12% decline after this setup.
03

Hidden Bullish Divergence

What it signals: trend continuation during uptrends — price makes a higher low while MACD makes a lower low on the pullback.

Trading strategy: add to existing longs or enter new longs on pullbacks showing this pattern. It confirms the uptrend will continue.

Pro tip: use this pattern to enter trending stocks during healthy corrections. The AAPL example demonstrates a perfect continuation setup.
04

Hidden Bearish Divergence

What it signals: trend continuation during downtrends — price makes a lower high while MACD makes a higher high on the bounce.

Trading strategy: enter short or add to shorts during relief rallies showing this pattern. Confirms the downtrend will resume.

Pro tip: these patterns provide low-risk entries during bear markets. The IWM example in Chapter 4 shows textbook hidden bearish divergence.
Real Charts, Real Moves

See Divergence in Action.

NVDA bearish divergence chart
NVIDIA (NVDA)Classic double top with bearish divergence at $140–150 preceded a 10%+ pullback
META bearish divergence chart
Meta Platforms (META)Textbook bearish divergence at $600 during the AI rally — MACD warned of weakness
SPY bullish divergence chart
S&P 500 ETF (SPY)Bullish divergence in October 2023 signaled the start of a powerful year-end rally
AAPL hidden bullish divergence chart
Apple (AAPL)Hidden bullish divergence during an uptrend — a perfect continuation pattern
MSFT topping pattern chart
Microsoft (MSFT)Classic topping formation with clear bearish MACD divergence
AMZN 2018 double top chart
Amazon (AMZN)Historical 2018 double top — divergence predicted a 31% decline
6detailed real-world examples with complete trading-platform setup instructions
What You'll Be Able to Do

From Late Reaction to Early Read.

Spot reversals earlyIdentify trend exhaustion before it becomes obvious to other traders.
High-probability setupsFocus on patterns with 70%+ success rates when properly identified.
Better risk managementClear entry points and stop placement for defined risk/reward ratios.
Works in all marketsApply these patterns to stocks, ETFs, forex, crypto, and commodities.

Complete Coverage.

History & Evolution of MACDStandard Settings & OptimizationDivergence Mechanics Regular Bullish DivergenceRegular Bearish DivergenceHidden Bullish Divergence Hidden Bearish DivergenceConfirmation TechniquesEntry Strategies (Aggressive & Conservative) Stop Loss PlacementProfit Targets & Trade ManagementDouble Top Patterns Double Bottom PatternsPrice vs MACD OppositionComplete Trading Framework Risk & Money ManagementPsychology of Trading Divergence6 Real-World Examples Platform Setup InstructionsCommon Pitfalls to Avoid
Ready When You Are

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Join traders who've transformed their approach with MACD Divergence mastery.

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