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 

 

 MACD line (blue - 12d minue 26d EMA) 

 Signal line (orange - 9d EMA) 

 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