MACD (Moving Average Convergence Divergence) is built from two exponential moving averages — usually a fast 12-day and a slow 26-day. The MACD line is fast minus slow. A 9-day average of that is the signal line, and the gap between them is drawn as a histogram. Under the fancy name it's a momentum gauge made of averages.
How it's read
When the MACD line crosses above its signal line, traders call it a bullish cross; below, bearish. When the histogram shrinks toward zero, momentum is fading. It reacts faster than a plain 200-day average but, being faster, it gives more false signals in choppy markets.
The catch
MACD is a repackaging of trend/momentum, and the durable, tradable version of that idea in our marketplace is the plain-vanilla one — a 200-day moving average and cross-sectional momentum, not MACD crosses. Crossover rules look great on a chart and often disappear once you charge realistic costs; that's exactly what reading a backtest is for.
Educational material — not investment advice.