MACD

General info

• Stands for Moving Average Convergence Divergence
• The MACD is a momentum indicator that shows the relationship between two moving averages
• The MACD line is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.
• The signal line is a nine-period EMA of the MACD line.
  

Commonly used to identify the changes in the strength, direction, momentum and direction of a trend

The MACD is made of 3 elements

1. MACD line (blue - 12d minue 26d EMA)
   
2. Signal line (orange - 9d EMA)
3. Histogram - differences between the MACD & Signal line

Signals

• Bullish when MACD (blue) crosses above signal (orange)
• Bearish when MACD (blue) crosses below signal (orange)
• zero line cross - above bullish, below bearish

Histogram interpretation

• Growing bars - momentum increasing
• Shrinking bars - momentum decreasing