MACD
Momentum indicator from difference of two EMAs and its signal line.
MACD = EMA(12)−EMA(26). Signal = EMA(9) of MACD. Histogram = MACD−Signal. Signals: crossover (bull/bear), divergence (warning reversal), histogram direction. Best in trends.
In plain words
Indicator measuring trend strength and direction from the difference between two moving averages. The big signal is divergence: price prints a new high but MACD doesn't. This is a warning that a reversal is coming. Works well alongside RSI.
Example
BTC Mar 2024 ATH: MACD divergence → -25% correction. ETH Sep 2023: bullish crossover at 1600 → +150% in 6 months. 4h MACD better for trading, 1D for investing.
Also known as: MACD