RiskPicksWhat is MACD?
MACD (Moving Average Convergence Divergence) shows the relationship between two exponential moving averages of price. It consists of:
- MACD line: 12-period EMA minus 26-period EMA
- Signal line: 9-period EMA of the MACD line
- Histogram: the difference between MACD and signal lines
Trading signals
When the MACD line crosses above the signal line, it's a bullish signal. When it crosses below, it's bearish. The histogram makes these crossovers easier to spot visually.