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Analysis

MACD — definition & meaning

A trend-and-momentum indicator built from two moving averages.

The MACD (Moving Average Convergence Divergence) tracks the relationship between two EMAs to show trend direction and momentum. It plots a MACD line, a signal line and a histogram.

Traders watch for the MACD line crossing its signal line, and for the histogram growing or shrinking. Like all moving-average tools, it lags price and works best alongside other analysis.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Moving average
A line that smooths price by averaging it over a set number of periods.
Exponential moving average (EMA)
A moving average that weights recent prices more heavily.
Relative strength index (RSI)
A momentum oscillator from 0–100 gauging overbought and oversold conditions.
Divergence
When price and an indicator move in opposite directions.
Volatility
How much and how quickly a price moves over time.
Volume
The number of units traded over a period — a gauge of activity.

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