MACD

Glossary · Technical Analysis

MACD (moving average convergence divergence) is a momentum indicator built from EMAs — the MACD line is the 12-period EMA minus the 26-period, plotted against a 9-period signal line with a histogram of the gap between them. Crossovers and histogram shifts show momentum turning before price makes it obvious.

"It's two EMAs having an argument — by the time they cross, momentum has already picked a side."

Read it in three layers: MACD line above the signal line means momentum favours longs; the histogram is the gap between them, and shrinking bars mean momentum is fading before any crossover prints; the zero line marks where the 12 EMA crosses the 26 — the trend's own referee. On the daily it's a decent regime filter. On low timeframes it's mostly noise wearing a suit.

MACD is built from moving averages, so it's late by design — the crossover confirms a move that already spent part of itself. Taking every cross in a ranging market is a whipsaw subscription. The money-saving read: act on crossovers only in the direction of the higher-timeframe trend, and treat histogram divergence at extremes as your early caution flag. It tells you momentum is turning; it doesn't promise price won't turn back.

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Questions

What is MACD in crypto trading?

MACD (moving average convergence divergence) is a momentum indicator built from EMAs — the MACD line is the 12-period EMA minus the 26-period, plotted against a 9-period signal line with a histogram of the gap between them. Crossovers and histogram shifts show momentum turning before price makes it obvious.

How would a trader say it?

It's two EMAs having an argument — by the time they cross, momentum has already picked a side.

Part of the Crypto Jargon glossary — every term, decoded the way a trader would say it.

Crypto Jargon

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