The concept
What it measures: the difference between a 12- and 26-period EMA, with a 9-period signal line and histogram.
Why it matters
It shows changes in momentum and strength.
How markets interpret it
Crosses of the signal line and zero line are watched. It does NOT tell you timing precisely — it lags like the averages it uses.
Key takeaways
- MACD is built from moving averages.
- Indicators describe past prices. None predicts the future.
Knowledge check
MACD is derived from…