Glossary

MACD (Moving Average Convergence Divergence)

By Rohan Fernandes, Founder · Updated 2026-08-22 · Educational reference, not investment advice

MACD measures trend momentum as the difference between a fast and a slow exponential moving average (classically 12 and 26 periods), compared against its own 9-period smoothed signal line. A positive and rising histogram reads as accelerating trend; crossings mark momentum shifts.

Because MACD is built from moving averages, it lags by construction and whipsaws in range-bound tape, generating crossing after crossing with no trend behind them. Pairing it with a trend-strength filter like ADX is the standard remedy: MACD reads direction and acceleration, ADX certifies a trend exists for it to describe.

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