Momentum Indicators

Moving Average Convergence Divergence (MACD)

Moving Average Convergence/Divergence

Deep Dive

Everything You Need to Know

Under the Hood

How It Works

MACD is calculated by subtracting the 26-period EMA from the 12-period EMA. A 9-period EMA of the MACD line (signal line) is plotted on top to generate trading signals.

In Practice

How Traders Use It

Buy signals occur when the MACD crosses above the signal line. Sell signals occur when it crosses below. Divergences between MACD and price indicate potential reversals.

Highlights

MACD at a Glance

Uses 12 and 26 period EMAs
Signal line: 9-period EMA of MACD
Bullish crossover: MACD crosses above signal
Bearish crossover: MACD crosses below signal
Histogram shows distance between MACD and signal

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