MACD

MACD (Moving Average Convergence Divergence) shows the relationship between two moving averages. It's one of the most versatile indicators — used for trend identification, momentum measurement, and divergence detection.

Why It Matters

MACD captures both trend direction and momentum strength in a single indicator. It can tell you not just which direction the market is moving, but whether that movement is accelerating or decelerating — which is often more valuable than direction alone.

Settings Explained

Direction — Bullish, bearish, or both.

Detection Mode — How the MACD generates signals:

• Signal Line Cross — Triggers when the MACD line crosses the signal line. The most common mode
• Zero Line Cross — Triggers when the MACD crosses above or below zero, indicating a trend change
• Custom Level Cross — Triggers at a specific MACD value you define
• Histogram Divergence — Detects when price and MACD histogram move in opposite directions, suggesting a potential reversal

Fast Period — The shorter moving average period. Standard is 12.

Slow Period — The longer moving average period. Standard is 26.

Signal Period — The signal line smoothing period. Standard is 9.

Level — Only used with 'Custom Level Cross' mode. Sets the specific MACD value that triggers the signal.

Divergence Lookback — Only used with 'Histogram Divergence' mode. How many candles to look back when checking for divergence patterns.

Look Back Mode — How far back the MACD is calculated.

Outputs

• MACD Line — The difference between the fast and slow moving averages
• MACD Signal — The smoothed version of the MACD line
• MACD Histogram — The difference between the MACD line and signal line, shown as bars

Example Use Case

You use MACD in 'Signal Line Cross' mode with standard settings (12, 26, 9). When the MACD line crosses above the signal line, it's a bullish signal. When it crosses below, it's bearish. This captures momentum shifts as they happen.