MACD explained
MACD (Moving Average Convergence Divergence) is a momentum and trend indicator that shows how two moving averages are pulling apart or coming together. It's excellent for spotting shifts in momentum before they show up clearly in price.
The three parts
- MACD line: the difference between a fast and a slow exponential moving average — classically the 12-period EMA minus the 26-period EMA.
- Signal line: a 9-period EMA of the MACD line. It smooths the MACD and acts as a trigger.
- Histogram: the MACD line minus the signal line, drawn as bars. This is the part Indicore reads for its MACD label, because it captures momentum most directly.
How to read it
- MACD crosses above the signal line — bullish momentum is building. The histogram flips from negative to positive.
- MACD crosses below the signal line — bearish momentum is building. The histogram flips from positive to negative.
- Distance from zero — the further the MACD line is from the zero line, the stronger the underlying trend. Crossing zero means the fast and slow averages have swapped order — a meaningful trend change.
- Histogram growing — momentum is accelerating. Histogram shrinking — momentum is fading, even if price is still rising.
How Indicore labels MACD. Raw histogram values are tiny for some instruments and
huge for others (Bitcoin's histogram can be in the tens; a forex pair's in the thousandths), so we
normalise the histogram as a percentage of price and label it Strong bullish,
Bullish, Bearish or Strong bearish. That makes
MACD comparable across every market on the same scale.
MACD and divergence
Like RSI, MACD can diverge from price. If price makes a new high but the MACD histogram makes a lower high, the up-move is running on weaker momentum — a caution flag. The reverse (price lower low, histogram higher low) hints that selling pressure is easing.
Avoiding false signals
- MACD lags. It's built from moving averages, so it confirms moves rather than predicting them. In choppy, sideways markets it produces frequent whipsaw crossovers.
- Trade with the trend. MACD crossovers work best in the direction of the larger trend. Check the daily trend before acting on a 5-minute crossover.
- Pair it with RSI. RSI gauges whether a move is overextended; MACD gauges momentum direction. Together they filter out many bad signals.
See MACD live
Indicore shows the MACD reading for every instrument across six timeframes. Compare, for instance, ETH / USDT, S&P 500 or Gold, or browse all markets.
This guide is educational and not financial advice. Indicators describe past and current price
behaviour; they do not guarantee future results.