What is it?
MACD is a momentum indicator that shows the relationship between two EMAs, helping you spot changes in trend strength or direction. It’s like a speedometer for price momentum.

How is it used?

  • Crossovers: MACD Line crossing above the Signal Line is a buy signal; crossing below is a sell.
  • Divergence: If price makes new highs/lows but MACD doesn’t, it may signal a reversal.
  • Trend strength: A widening histogram indicates strong momentum.

How is it calculated?

  • MACD Line: 12-period EMA - 26-period EMA.
  • Signal Line: 9-period EMA of the MACD Line.
  • Histogram: MACD Line - Signal Line.

MACD Line = EMA12 - EMA26  

Signal Line = EMA9(MACD Line)  

Histogram = MACD Line - Signal Line 

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