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MACD
(Moving Average Convergence Divergence)
MACD (Moving Average Convergence Divergence) is a trend-following indicator showing the relationship between two EMAs (12-day and 26-day). The MACD line (12EMA - 26EMA) and signal line (9EMA of MACD) generate cross-over signals.
A bullish crossover occurs when MACD crosses above its signal line, often used with RSI to confirm momentum. Institutional traders apply MACD to ETFs and forex. The histogram visualizes divergence (potential reversals). While powerful, MACD lags in sideways markets—combine with VIX for context. The CFTC notes algorithmic traders frequently embed MACD in HFT strategies.
A bullish crossover occurs when MACD crosses above its signal line, often used with RSI to confirm momentum. Institutional traders apply MACD to ETFs and forex. The histogram visualizes divergence (potential reversals). While powerful, MACD lags in sideways markets—combine with VIX for context. The CFTC notes algorithmic traders frequently embed MACD in HFT strategies.