MACD is a trend indicator that shows direction, strength and slowing momentum at once. Here is what it is made of and how to read it.

What MACD is made of

MACD (Moving Average Convergence Divergence) is the difference between a fast and a slow exponential moving average, 12 and 26 periods by default. That difference is the MACD line. The signal line is its own 9-period moving average. The histogram shows the gap between them.

How to read it

Crossovers. The MACD line crossing above the signal line means momentum is turning up; crossing below means down. Crossovers above zero in an uptrend are more reliable than those against the trend.

The zero line. MACD above zero means the fast average is above the slow one and the trend is up. Crossing zero confirms a trend change, with a lag.

The histogram. Shrinking bars mean the move is losing strength even while price keeps going. This is MACD's earliest signal.

MACD divergences

As with RSI, a gap between MACD and price warns of a weakening trend: a new price high with a lower histogram peak. More in our guide to divergence.

Where MACD fails

MACD is built on moving averages, so it always lags. In a range it produces a string of false crossovers. It works best on higher time frames — 4 hours and daily — alongside levels, volume and the liquidation heatmap.

MACD is available in our terminal together with RSI and other indicators.