Skip to content
GetProfitable
Search
Dictionary

MACD

Moving Average Convergence Divergence: the gap between a 12- and 26-period EMA, with a 9-period signal line and a histogram.

MACD line, signal line and histogram under a price chartA price line above a lower panel holding two curves and a bar histogram measured from a zero line, with the point where the faster curve rises through the slower one circled.PRICEMACD (12, 26, 9)0signalMACDbullishcrossover
MACD, signal line and histogram. The MACD line is the gap between a fast and a slow moving average, and the signal line is a smoothed copy of it. The bars show the distance between the two, and the circle marks where the faster line rises through the slower one.

MACD tracks the distance between two moving-averages. When the fast average pulls away from the slow one, momentum is increasing; when they converge, it is fading. The histogram shows the MACD line minus its signal line.

Traders use crossovers of the MACD and signal line and divergence against price. Like RSI it lags, and in a range it produces many whipsaws.

Example: with the 12 EMA at $101.50 and the 26 EMA at $100.00, MACD is +1.50. If the signal line is at +1.20, the histogram is +0.30 and rising.

Related: moving-average, rsi, divergence, whipsaw

Educational only, not advice. Spotted an error? Post in Site Feedback.