Also called Moving average convergence divergence

MACD

The gap between a fast and a slow moving average, plotted against its own average. Widening upward means momentum is building, narrowing means it is fading.

Updated 2026-09-03

MACD, the moving average convergence divergence, measures the gap between a fast and a slow exponential moving average. It converts the relationship between two trend lines into a single oscillating number.

MACD line = 12-period EMA − 26-period EMA

A signal line, the 9-period EMA of the MACD line itself, is plotted against it. The gap between the two is the histogram. See ema.

Read it as momentum rather than direction. A rising MACD means the fast average is pulling away from the slow one, so the trend is accelerating. A MACD above zero but falling means the trend is still up but losing force, which is often more useful than the crossing itself.

The standard 12, 26 and 9 periods date from when a trading month was measured in six-day weeks. They persist because everyone uses them, which is a genuine reason: a widely watched level becomes self-reinforcing. It is not a reason to believe they are optimal.

See also

  • EMA — An average of recent prices that weights the latest days most heavily, so it turns faster than a simple average. A fast one crossing above a slow one is the classic trend signal.
  • Signal confidence — The weighted entry score a bar must clear before the strategy opens a trade, built from trend and momentum agreement. It says nothing about whether a stock is cheap.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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