All TermsIndicator

MACD (Moving Average Convergence Divergence)

MACD plots the difference between a 12-period EMA and a 26-period EMA, alongside a 9-period EMA of that difference (the signal line). Crossovers between the two lines mark momentum shifts.

Components

MACD line — 12 EMA minus 26 EMA
Signal line — 9 EMA of the MACD line
Histogram — MACD line minus signal line

Common signals

A bullish MACD crossover (MACD line crosses above signal) often precedes EMA crossovers, providing earlier entry. The histogram visualises momentum: growing bars = accelerating, shrinking = decelerating.

MACD in Pine Script

pinescript

[macdLine, signalLine, histLine] = ta.macd(close, 12, 26, 9)
if ta.crossover(macdLine, signalLine)
    strategy.entry("Long", strategy.long)

Strategies that use MACD (Moving Average Convergence Divergence)

EMA Crossover

Two exponential moving averages — buy when the fast crosses above the slow, exit when it crosses back.

Triple EMA Trend

Three EMAs aligned — trade only when all three confirm the same direction.

Related Terms

EMA (Exponential Moving Average)

The exponential moving average weights recent price data more heavily than older bars, making it faster to react than a simple moving average.

RSI (Relative Strength Index)

The RSI oscillates between 0 and 100, measuring the velocity of recent gains vs losses to identify overbought and oversold conditions.

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