How to interpret MACD

MACD indicator (Moving Average Convergence/Divergence) is used to spot changes in the strength, direction and duration of a trend. MACD histogram is the difference between a 26-period and 12-period exponential moving averages (EMA). In order to show buy/sell opportunities, a so-called signal line (9-period moving average) is plotted on the MACD histogram.

How to interpret:

1. Crossovers.
   • Buy when the MACD-histogram rises above the signal line. Sell when the MACD-histogram falls below the signal line.
   • Buy when the MACD-histogram rises above 0. Sell ​​when the MACD-histogram falls below 0.
2. Convergence/divergence. Bearish convergence occurs when the price is printing lower lows, but the histogram – higher lows (buy signal). Bullish divergence occurs when the price is printing higher highs, but the histogram – lower highs (sell signal).
3. Histogram bars. Buy when histogram bars start growing after a decline. Sell when histogram bars start declining after growth.