> ## Documentation Index
> Fetch the complete documentation index at: https://learn.algopilot.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Movering Average Convergence Divergence (MACD)

**What is it?**\
MACD is a momentum indicator that shows the relationship between two EMAs, helping you spot changes in trend strength or direction. It’s like a speedometer for price momentum.

**How is it used?**

* **Crossovers**: MACD Line crossing above the Signal Line is a buy signal; crossing below is a sell.
* **Divergence**: If price makes new highs/lows but MACD doesn’t, it may signal a reversal.
* **Trend strength**: A widening histogram indicates strong momentum.

**How is it calculated?**

* **MACD Line**: 12-period EMA - 26-period EMA.
* **Signal Line**: 9-period EMA of the MACD Line.
* **Histogram**: MACD Line - Signal Line.

MACD Line = EMA12 - EMA26  

Signal Line = EMA9(MACD Line)  

Histogram = MACD Line - Signal Line 

<sub>The above content is designed for informational purposes only, and is explicitly not investment advice. Algo Pilot is a US based technology company and not a bank, broker-dealer, or RIA. As such, Algo Pilot LLC does not provide investment advice and is not a member, SIPC. Brokerage services offered by 3rd parties are not directly affiliated with Algo Pilot LLC, and Algo Pilot users may choose the broker relationship that they desire.</sub>