What is MACD indicator?

What Is MACD Indicator?

MACD (Moving Average Convergence Divergence) is an indicator built from two moving averages and a signal line. The MACD line crossing above the signal line can be read as bullish; crossing below as bearish. The histogram shows the difference between the two. Traders also look at MACD divergence (price makes new high/low but MACD does not) for potential reversals. MACD works best in trending markets; in sideways markets it can give false signals. Use it with other tools and risk management. It does not predict the future.