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What is MACD?
MACD, short for moving average convergence divergence, is a chart indicator that tracks the gap between a faster and a slower moving average of price. It is drawn as a MACD line and a smoother signal line, and crossings between the two are read as shifts in momentum.
What it means for you
MACD is built entirely from past prices, so it describes momentum that has already happened and does not tell you what happens next. Because it is made of moving averages, it lags, and in choppy markets its crossovers can give several false signals in a row.
How it works
The standard MACD line is the 12-period exponential moving average of closing prices minus the 26-period one. It is positive when the faster average is above the slower, read as upward momentum, and negative when below. The signal line is a 9-period exponential moving average of the MACD line itself, smoothing it further. Analysts treat the MACD line crossing above the signal line as a buy signal and crossing below as a sell signal.
Sources: Deep et al.: Assessing the Impact of Technical Indicators on Machine Learning Models for Stock Price Prediction (arXiv, v1), Ma, Ventre and Polukarov: Denoised Labels for Financial Time-Series Data via Self-Supervised Learning (arXiv), Technical Analysis Meets Machine Learning: Bitcoin Evidence (arXiv) · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.