MACD (Moving Average Convergence Divergence) was developed by Gerald Appel in the 1970s and plots the difference between a 12-period and a 26-period exponential moving average as the main line. A 9-period EMA of that main line is overlaid as the signal line, and the difference between the two is rendered as a histogram. A bullish crossover occurs when the main line crosses above the signal line; a bearish crossover when it crosses below. The zero line acts as a trend filter: MACD above zero implies a bullish regime, below zero a bearish one. The histogram visualizes momentum acceleration: an expanding histogram means strengthening momentum, a contracting one means weakening. As with RSI, divergence between price and the histogram is among MACD's most actionable signals. Because MACD is a trend-following indicator, it generates false crossovers in choppy ranges, and combining it with a trend-strength filter such as ADX is a standard practice. Period settings can be tuned (5-13-1 for fast scalping, 19-39-9 for slower swing setups).
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What is MACD?
MACD is a trend-following momentum indicator built from the difference between 12-period and 26-period exponential moving averages, plus a 9-period signal line.