Indicators
MACD
Shows the relationship between two moving averages.
Full Definition
Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator showing the relationship between two EMAs (typically 12 and 26 periods). The MACD line minus a 9-period signal line creates the histogram. Traders look for crossovers, divergences, and histogram patterns. MACD helps identify trend direction, momentum, and potential reversals.
Example
When the MACD line crosses above the signal line, it generates a bullish signal. When the histogram bars grow taller, it indicates increasing momentum. Divergence between price and MACD can warn of trend exhaustion.
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