What MACD is
MACD subtracts a slower exponential moving average (26-period) from a faster one (12-period). A 9-period EMA of that result is the signal line, and the gap between them is the histogram.
How to read it
- MACD above its signal line — upside momentum building.
- MACD below its signal line — downside momentum building.
- Histogram expanding/contracting shows momentum accelerating or fading.
How we use it
MACD crossovers help time entries within a trend you've already identified with the moving averages. We read it alongside RSI and the 50/200-day structure rather than in isolation.