EncyclopediaMACD
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In one line: The gap between a fast and a slow moving average, plus a signal line.
Evidence
Strength: mixed. Heng and Niblock (2014) found MACDThe gap between two moving averages, used as a trend/momentum gauge. signals did not earn extra profit after costs and risk on Southeast Asian index futures. Cohen and Cabiri (2015) tested RSIA 0–100 gauge of how strong recent gains are compared with losses. and MACD against buying and holding on four stock indices (DJI, FTSE, NK225, TA100) from 2007 to 2012. RSI did best and MACD second. The oscillators tended to beat buy-and-hold in falling markets and lag behind in rising markets.
Strength: mixed. Heng and Niblock (2014) found MACDThe gap between two moving averages, used as a trend/momentum gauge. signals did not earn extra profit after costs and risk on Southeast Asian index futures. Cohen and Cabiri (2015) tested RSIA 0–100 gauge of how strong recent gains are compared with losses. and MACD against buying and holding on four stock indices (DJI, FTSE, NK225, TA100) from 2007 to 2012. RSI did best and MACD second. The oscillators tended to beat buy-and-hold in falling markets and lag behind in rising markets.
MACD stands for Moving AverageThe average price of the last X candles, drawn as a line. Convergence Divergence. It is built from two exponential Moving averages. When the gap grows, momentum is said to grow.
Common settings are 12, 26 and 9 periods (source: Investopedia, secondary).
Related
Sources & studies
- Investopedia (secondary): MACD
- Heng & Niblock (2014), Trading with Tigers, Int. Economic Journal 28(4)
- Cohen & Cabiri (2015), Can technical oscillators outperform the buy and hold strategy?, Applied Economics
Last checked: 2026-11-04 · Educational, not financial advice.
Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.