MACD (Moving Average Convergence Divergence) — Complete Reference
Momentum + trend indicator built from the difference of two EMAs with a signal line.
What MACD actually measures
MACD is the difference between two exponential moving averages — typically 12 and 26 periods — with a 9-period EMA of that difference plotted as a signal line. The histogram shows the gap between MACD line and signal line. It captures both momentum and trend direction.
Standard MACD settings (12, 26, 9)
These are the defaults Gerald Appel introduced. Day traders often use faster settings like 5, 13, 6 or 8, 17, 9. Faster settings produce more crossovers — more signals, more false positives. Always test on your timeframe.
Reading MACD signals
Bullish crossover = MACD line crosses above signal line. Bearish = crosses below. MACD above zero = uptrend, below zero = downtrend. The histogram's direction shows whether momentum is building or fading.
MACD divergence — strong signal
Like RSI, MACD divergence (price making a new high while MACD makes a lower high) is the most reliable signal in the indicator. Bullish divergence: lower price low, higher MACD low. Watch for divergence near key support/resistance for confluence.
Where MACD shines and fails
Trending markets — MACD is excellent. Sideways/chopping markets — MACD produces dozens of false crossovers. Pair with ADX (only trade MACD crossovers when ADX > 25) to filter chop.
Combining MACD with other indicators
MACD + price action structure works well. MACD + RSI is somewhat redundant (both are momentum-based). Best combinations: MACD + ADX (trend filter), MACD + volume (confirmation), MACD + key support/resistance levels (location confluence).
MACD on different timeframes
Multi-timeframe MACD is a documented edge. When daily MACD is positive and hourly MACD just crossed above zero, the setup has tailwind. Conflicting timeframes (daily negative, hourly positive) = lower-conviction trade.
Free MACD scanners and tools
SultraxAI uses MACD as one of several inputs in its signal model and publishes the actual win rates on signals it generates. View live scanner →