How can you know if divergence between price and the Moving Average Convergence Divergence indicator (MACD Divergence) is right for you? To answer this question, you might want to see how MACD and especially MACD Divergence indicated some prosperous times in which to buy stocks and Exchange Traded Funds, or ETFs. One of the best resources to see how MACD Divergence produced signals to buy and/or sell stocks and ETFs is backtesting.
You may find helpful the following summary of trades simulated by the backtesting engine on the SPY (the ETF of the S&P 500 composite) (more…)