What is MACD?

The MACD is a technical indicator that reads the exponential averages two by two and it shows the difference as a history gram. If it is below 0, it indicates that the fast average is below the slow one. Otherwise, it is above. Moreover, you have a third signal which is based in a simple moving average, calculated based on the value of the difference between both exponential averages.


When the level of the history gram crosses above the level of signal we consider it as a buying signal since the fast exponential average will be increasing its distance from the slow one quite fast, coming from more stable movements (Inside the average of the differences). Otherwise, we will consider a selling signal.