MACD

Also called: moving average convergence divergence

Moving Average Convergence Divergence — trend-following momentum indicator built from two EMAs and their difference.

MACD has three components: the MACD line (12-EMA minus 26-EMA), the signal line (9-EMA of the MACD line), and the histogram (MACD line minus signal line).

Crossovers, zero-line crosses, and divergence are the three classic uses. Like all lagging indicators, MACD shines in trending markets and whipsaws in chop.

MACD line crosses above the signal line while still below zero — early bullish reversal signal.

MACD line = EMA(12) − EMA(26)
Signal line = EMA(9) of MACD line
Histogram = MACD line − Signal line

MACD

Definition

Example

Formula