Moving average convergence divergence (MACD)<\/strong> is a technical tool calculated by subtracting a 26-day exponential moving average (EMA) from a 12-day EMA, resulting in what is known as the MACD line.<\/p>\n A 9-day EMA of the MACD line, called the signal line<\/strong>, is then plotted alongside it, and the difference between the two is often displayed as a histogram.<\/p>\n Crossovers<\/strong> \u2014 when the MACD line crosses the signal line, some traders treat it as a potential momentum shift.<\/p>\n<\/li>\n Zero-line crosses<\/strong> \u2014 the MACD line moving above or below zero is sometimes used to gauge overall trend direction.<\/p>\n<\/li>\n Divergence<\/strong> \u2014 when price and MACD move in different directions, it is sometimes watched as a sign that momentum may be weakening.<\/p>\n<\/li>\n<\/ul>\n As a precaution, MACD is a lagging indicator built from moving averages, so signals can arrive after a meaningful part of a price move has already happened, particularly in choppy or sideways markets.<\/p>\n MACD is used across forex, equities, commodities, and indices, partly because it combines two concepts, trend and momentum, into a single, visual indicator. Its default settings of 12, 26, and 9 periods are widely used, though some traders adjust these to suit shorter or longer-term trading styles.<\/p>\n MACD is widely used because it combines trend and momentum information in one indicator, but it works best when considered alongside other tools and overall market context, rather than relied on in isolation.<\/p>\n Risk Warning:<\/strong>Trading CFDs involves significant risk and may not be suitable for all investors. Losses can exceed your initial deposit. Please ensure you fully understand the risks involved before trading.<\/p>\n","protected":false},"excerpt":{"rendered":" What Is MACD? Moving average convergence divergence (MACD) is a technical tool calculated by subtracting a 26-day exponential moving average (EMA) from a 12-day EMA, resulting in what is known as the MACD line. A 9-day EMA of the MACD line, called the signal line, is then plotted alongside it, and the difference between the Continue Reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[100],"tags":[107],"class_list":["post-61586","post","type-post","status-publish","format-standard","hentry","category-trading-glossary","tag-technical-analysis"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t\n\n
\n Component<\/strong><\/th>\n What It Represents<\/strong><\/th>\n<\/tr>\n<\/thead>\n\n \n MACD line<\/td>\n 12-day EMA minus 26-day EMA<\/td>\n<\/tr>\n \n Signal line<\/td>\n 9-day EMA of the MACD line<\/td>\n<\/tr>\n \n Histogram<\/td>\n Difference between MACD line and signal line<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n What Is MACD Trading Used For<\/h2>\n
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Limitations to Keep in Mind<\/h2>\n
Why MACD Is Popular Across Asset Classes<\/h2>\n
Reading Momentum, Not Forecasting It<\/h2>\n