Moving Average Convergence Divergence (MACD) tracks the relationship between two exponential moving averages of price. The MACD line is the fast EMA minus the slow EMA; a signal EMA of that line and a histogram of the gap complete the indicator. It is a hybrid momentum-and-trend tool.
How traders use it
- Trade the crossover of the MACD line and its signal line for momentum shifts.
- Read the zero-line cross as a change in the underlying trend direction.
- Use histogram divergence against price to anticipate fading momentum.
See it in dtcharts
Add MACD from the indicators panel in the dtcharts terminal, or grab ready-to-paste code for MetaTrader, TradeStation and TradingView in the MACD Traders' Tips article.