Moving Average Convergence/Divergence (MACD)

The Moving Average Convergence/Divergence is a momentum oscillator indicator used to identify the trend and momentum of an asset or stock. The indicator consists of two lines, the MACD Line, Signal Line, and a histogram. 

This indicator is used to identify the convergence and divergence of the two lines. Convergence is when the two lines are close, and divergence is when the two lines are far away. Crossovers are a common use for this indicator. When the shorter line (MACD line) crosses over the long line (signal line), the momentum upwards increases, and the opposite is true for momentum downwards. Another significant crossover is when the MACD line crosses over the 0 line, indicating that the momentum is heading upwards when going from negative to positive or downwards when going from positive to negative.

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Moving Average Convergence/Divergence Formula

MACD Line: (12-day EMA - 26-day EMA)

Signal Line: 9-day EMA of MACD Line

MACD Histogram: MACD Line - Signal Line

Formula Source: StockCharts

For more information (also the source) visit: StockCharts

How to Visualize Moving Average Convergence/Divergence

1. Head over to TradingView and go to your desired pair

2. Click "Indicators" in the top bar

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3. Select "Moving Average Convergence Divergence"

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4. Click on the cogwheel to change settings

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5. Tradingview has a histogram that does nothing but show the crossovers of the two Moving Average Convergence Divergence lines which you can disable in the styles tab

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6. Now you can modify the Moving Average Convergence Divergence indicator and once you like the settings you can transfer them over to BravoBot

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Revision #3
Created 16 November 2022 10:32:05 by BravoBot
Updated 6 March 2023 13:22:37 by BravoBot