MACD (Moving Average Convergence Divergence)
Lesson 4 of 128 min5 exercises
Learn · 1/4
The Trend and Momentum Combo
MACD is a versatile indicator that shows both trend direction and momentum. It's calculated using the difference between two EMAs and is one of the most reliable indicators available.
MACD Components
MACD Line = 12 EMA - 26 EMA
- Shows the relationship between short and long-term momentum
Signal Line = 9 EMA of MACD Line
- A smoother version for generating signals
Histogram = MACD Line - Signal Line
- Visual representation of momentum strength
- Shows the relationship between short and long-term momentum
Signal Line = 9 EMA of MACD Line
- A smoother version for generating signals
Histogram = MACD Line - Signal Line
- Visual representation of momentum strength
Learn · 2/4
MACD Signals
Crossovers:
- MACD crosses ABOVE signal line → Bullish (buy signal)
- MACD crosses BELOW signal line → Bearish (sell signal)
Zero Line:
- MACD above 0: Overall bullish momentum
- MACD below 0: Overall bearish momentum
Histogram:
- Growing histogram: Momentum increasing
- Shrinking histogram: Momentum weakening
- MACD crosses ABOVE signal line → Bullish (buy signal)
- MACD crosses BELOW signal line → Bearish (sell signal)
Zero Line:
- MACD above 0: Overall bullish momentum
- MACD below 0: Overall bearish momentum
Histogram:
- Growing histogram: Momentum increasing
- Shrinking histogram: Momentum weakening
Example
MACD: 0.25, Signal: 0.15, Histogram: 0.10 MACD > Signal = Bullish ✓ MACD > 0 = Bullish momentum ✓ Histogram positive = Buyers in control ✓
All three components align bullish
Learn · 3/4
MACD Divergence
Like RSI, MACD can show divergences:
- Price higher high + MACD lower high = Bearish divergence
- Price lower low + MACD higher low = Bullish divergence
MACD divergences are especially powerful at trend extremes.
- Price higher high + MACD lower high = Bearish divergence
- Price lower low + MACD higher low = Bullish divergence
MACD divergences are especially powerful at trend extremes.
Tip
SUTOK tracks MACD crossovers as separate high-priority signals. A MACD bullish crossover adds +2 to your analysis score.
Watch out
MACD is a lagging indicator - crossovers confirm moves that already started. In choppy markets, it can generate false signals.
Learn · 4/4
Key takeaways
- MACD shows trend direction AND momentum
- MACD crossing above signal line = buy signal
- MACD above zero = bullish; below zero = bearish
- MACD divergences signal potential reversals
Next: 5 quick exercises. Miss one and it comes back at the end.