Forex glossary
MACD (Moving Average Convergence Divergence)
Main MACD is the faster EMA minus the slower EMA, commonly using 12 and 26 periods; the signal line smooths that difference. Many tools plot MACD minus signal as the histogram, while MetaTrader displays main MACD as bars. Signal smoothing and presentation depend on the platform.
Illustrative example
How does it work in practice?
Assume the fast EMA is 101 USD, the slow EMA is 100 USD and the signal is 0.6 USD. Main MACD is 1 USD; a MACD-minus-signal histogram is 0.4 USD.
A case to work through
A positive difference below zero
Hypothetically, fast EMA=98, slow EMA=100 and signal=−3.
- Main MACD is −2.
- The MACD-minus-signal histogram is −2−(−3)=1 despite negative main MACD.
What follows? Name the series before interpreting its position relative to zero.
Example boundary: MetaTrader can plot main MACD as bars; moving-average settings can differ.
Which series are you reading?
Text description of the diagram
- Input averages: Check fast and slow lengths and MA types.
- Main MACD: Fast average minus slow average.
- Difference histogram: MACD minus signal if the platform defines it that way.
A useful distinction
MACD (Moving Average Convergence Divergence) / Momentum Oscillator
MACD is a specific moving-average difference; momentum oscillators form a broader group of formulas and scales.
Check your understanding
Distinguish main MACD's sign from the difference histogram's sign.
Show the answer and explanation
0.5
Subtracting a negative gives −1.5+2.
Oscillators without mixed scales
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Related terms
Sources and documentation
- TradingView – MACD
Main MACD, signal smoothing and the MACD-minus-signal histogram.
Document read: - MetaTrader 5 – MACD
MetaTrader's main-MACD bars and signal-line convention.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.