Moving Average Convergence Divergence (MACD)
The Moving Average Convergence Divergence (MACD) was developed by Gerald Appel, and is based on the differences between two moving averages of different lengths, a Fast and a Slow moving average. A second line, called the Signa” line is plotted as a moving average of the MACD. A third line, called the MACD Histogram is optionally plotted as a histogram of the difference between the MACD and the Signal Line.
MACD = FastMA - SlowMA
- FastMA is the shorter moving average and SlowMA is the longer moving average.
- SignalLine = MovAvg (MACD)
- MACD Histogram = MACD - SignalLine