Moving Average Convergence Divergence (MACD)

Two lines are calculated and built in the indicator:

MACDfast — fast line
SIGNAL — signal (slow) line
MACD is the difference between the fast 12-day exponential moving average (fast EMA) and the slow 26-day exponential moving average (slow EMA).
MACDfast = EMA(12) [Price] — EMA(26) [Price];
the results are smoothed with the help of EMA to eliminate sudden fluctuation:
SIGNAL = EMA(9) [MACDfast],
где Price — usually a close price.

MACD signals:

• If MACD is below the zero line then trend is bearish, if it is above it then the trend is bullish;
• Divergence is the strongest signal on this indicator. This is a divergence in the direction of the waves movement of the chart and correspondent waves of the indicator. It signals early market reversal; ;

Signal of the bullish trend reversal or damping

Signal of the bearish trend reversal or damping

• Crossing of the lines of the indicator in the direction of the trend may be used as a signal to open positions.
• If MACD is below zero and there is no bearish convergence, then crossing of the lines from below signals upward correction.
• If MACD is above zero and there is no bullish divergence, then crossing of the lines from above signals downward correction.