MACD
A momentum indicator built from moving-average differences, used to spot trend shifts and momentum changes.
MACD (Moving Average Convergence Divergence) subtracts a slower moving average from a faster one, then plots that line against its own signal-line average. Crossovers, and the widening or narrowing of the gap (the histogram), are read as momentum shifting bullish or bearish.
Traders use MACD crossovers as trend-change cues and its divergences from price as early warnings of momentum fading. Because it’s derived entirely from moving averages, it lags price and generates false signals in choppy, range-bound markets — a well-known weakness. It’s best treated as one confirmation among several, not a standalone system, a theme common to all technical indicators.