MACD

Moving Average Convergence Divergence (MACD) is most widely used trading indicator in technical analysis of assets. MACD measures the relationship between two Moving Average line graphically shown on chart. On MACD chart, there are three colors lines as, Blue ( MACD line), red ( Signal line) and green ( a histogram line). The MACD line is the difference between two exponentially leveled moving averages: usually 12 and 26 periods, whilst the signal line is generally a 9 period exponentially smoothed average of the MACD.

HOW  MACD IS MEASURED?

MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period Exponential Moving Average (EMA)

• When MACD line crosses above the ZERO line, this signal is UPTREND.
• When MACD line crosses below the ZERO line, this signal is DOWNTREND.

In addition, MACD provides buy or sell signals when the two MACD lines cross over as; 

• When MACD line crosses above the signal line, traders use this as a BUY indication.
• When MACD line crosses below the signal line, traders use this as a SELL indication.