A bullish MACD crossover occurs when:

MACD crosses above signal. MACD line crossing above the signal line is a bullish signal.

The MACD histogram represents:

Distance between MACD and Signal lines. The histogram visually shows the gap between MACD and Signal lines.

MACD Indicator

Convergence and divergence of moving averages

The Moving Average Convergence Divergence (MACD) is a versatile trend-following and momentum indicator.

Components: - MACD Line: 12 EMA minus 26 EMA (the "fast" line) - Signal Line: 9 EMA of the MACD line (the "slow" line) - Histogram: Visual difference between MACD and Signal lines

Key signals: 1. MACD crosses above Signal line → Bullish (buy) 2. MACD crosses below Signal line → Bearish (sell) 3. MACD crosses above zero → Trend turning bullish 4. MACD crosses below zero → Trend turning bearish 5. Histogram growing → Momentum increasing 6. Histogram shrinking → Momentum fading

Like RSI, MACD divergence is powerful. Price making new highs while MACD makes lower highs signals potential bearish reversal.

Pro tip: MACD works best on 4H and Daily charts for swing trading.

Pro tip: Histogram color change is an early signal before the actual crossover.

Common mistake: Using MACD on very low timeframes (1M, 5M). Better: MACD is a lagging indicator — use on 1H+ timeframes for reliability.

Key takeaways

MACD Line = 12 EMA - 26 EMA
Signal crossover = trade signal
Zero line cross = trend change
Histogram shows momentum strength

Quiz

A bullish MACD crossover occurs when: Answer: MACD crosses above signal. MACD line crossing above the signal line is a bullish signal.
The MACD histogram represents: Answer: Distance between MACD and Signal lines. The histogram visually shows the gap between MACD and Signal lines.

Educational content, not financial advice.