Step by step
How to read it
- 1The price low.
- 2The MACD line crosses above its signal line: momentum is turning.
- 3It crosses zero only after price has already risen. MACD follows price; it does not lead it.
Watch out
Common mistake
Using MACD crosses as entries on their own. They lag, and in a range they flip back and forth.
In one line
Definition
An indicator built from two moving averages and their difference; it shows momentum, always a little late.
Check yourself
Check yourself
Why is the MACD “late”?