Finance glossary
MACD
Definition
A trend indicator built from the difference between two moving averages.
Moving Average Convergence Divergence subtracts a longer exponential moving average from a shorter one, plotted with a signal line and histogram. Crossovers and divergences signal shifts in momentum and trend. It is one of the most widely used technical indicators for timing entries and exits.
In a sentence
When the MACD line crossed above its signal line, the trader read it as building upward momentum.
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