MACD Indicator

The three parts of MACD

MACD line   = 12-period EMA − 26-period EMA
Signal line = 9-period EMA of the MACD line
Histogram   = MACD line − Signal line

• The MACD line is positive when the short-term average is above the long-term one, and negative when it’s below.
• The signal line is a smoothed version of the MACD line.
• The histogram shows the gap between them: bars grow as the lines move apart and shrink as they converge.

How traders read MACD

• Signal line crossovers: the MACD line crossing above the signal line is often read as bullish momentum, and crossing below as bearish.
• Zero line crossovers: the MACD line crossing zero means the 12 EMA has crossed the 26 EMA.
• Divergence: price making new highs while MACD makes lower highs (or the reverse) suggests weakening momentum.

Because it’s built from moving averages, MACD lags price, and crossovers are frequent in sideways markets.

Settings

The standard settings are 12, 26, 9. Unlike RSI, MACD has no fixed upper or lower limit, so its values depend on the price of the instrument.

Adding MACD on TradingView

Click Indicators and search for MACD. It opens in its own pane with the MACD line, signal line and histogram, using 12, 26, 9 by default. Learn how the underlying averages work in our moving average guide.

Educational explanation only. ChartWatch is independent and doesn’t give trading or investment advice. Trading carries a risk of loss.

FAQ

More free TradingView tools