What MACD shows
The gap between the 12 and 26 EMA, a 9-period signal line, and a histogram of the difference.
Indicator guide · Oscillators
MACD: what it shows, settings and how to read it.
The gap between the 12 and 26 EMA, a 9-period signal line, and a histogram of the difference.
How it is calculated
The MACD line is the 12-period EMA minus the 26-period EMA. The signal line is a 9-period EMA of the MACD line, and the histogram is the gap between the two.
Usual settings
12, 26 and 9.
How traders read it
The MACD line crossing above its signal line is bullish, below is bearish. Above zero the bigger trend is up.
Where it fails
It is built from averages, so it lags in fast markets.
What to combine it with
A long moving average for the trend, and RSI to avoid entries when momentum is already exhausted.
Try MACD on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose MACD. Click its name on the chart to change the settings. It is free for every member.
More in "Oscillators": RSI · Stochastic · Stochastic RSI · CCI · Williams %R · ROC · All 25 indicators
Questions
Frequently asked questions
What is the MACD indicator?
The gap between the 12 and 26 EMA, a 9-period signal line, and a histogram of the difference.
What are the best settings for MACD?
The usual settings are: 12, 26 and 9. No setting is best in every market, so test a change on past data before relying on it.
Is MACD reliable on its own?
No single indicator is. It is built from averages, so it lags in fast markets. Most traders use it together with: A long moving average for the trend, and RSI to avoid entries when momentum is already exhausted.
How do I add MACD to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose MACD. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns