Regarding MACD divergence, many traders are unaware of the common misconceptions. Especially beginners tend to think of this indicator as a universal signal.

In reality, what MACD divergence indicates is simply an increased likelihood of exhaustion of momentum or a correction. This is a crucial point—divergence ≠ reversal. Failing to understand this difference can lead to significant trading losses.

For example, looking at the 4-hour chart of BTC, even when MACD divergence appears, the market may just be experiencing increased exhaustion without a reversal occurring. If many traders rely solely on this indicator to open short positions, they could face losses with a certain probability.

So, how can you correctly utilize divergence signals? The answer is simple—combine multiple analysis methods. You must consider overall market trends and fundamental analysis.

For instance, consider a scenario where BTC’s daily chart is moving within a certain range. When MACD divergence occurs near the upper end of the range, and the market pulls back to around 20,000 points, trusting only this indicator to place a short order might yield profits.

However, combining wave theory changes the perspective. If MACD divergence occurs around 25,000, it could indicate a correction wave in wave B. In this case, the 20,000 level would be the start of wave C, which could be a better entry point. Incorporating moving average support levels can further improve accuracy.

Ultimately, relying solely on an indicator is not enough. Using multiple methods—wave theory, MACD divergence, moving averages—simultaneously can help you aim for more reliable profits. Including trendline analysis as part of a comprehensive approach is also essential.

Next, I want to delve deeper into wave theory. I hope you enjoy trading and that everyone can achieve profits.