Indicators · 6 min read
MACD explained
MACD — Moving Average Convergence Divergence — looks complicated on screen, but every part of it is just the distance between two moving averages.
Three parts
The MACD line is the 12-period EMA minus the 26-period EMA. When the fast average is above the slow one, MACD is positive; when below, negative. The chart above shows both EMAs on the price pane so you can see the gap MACD measures.
The signal line is a 9-period EMA of the MACD line — an average of an average. The histogram is MACD minus signal, drawn as bars around zero.
Live chart · Binance spot data. Drag to pan.
What each part says
MACD above zero: recent prices are, on average, above longer-term prices. MACD rising: that gap is widening. The histogram shrinking: the MACD line is converging with its own average, meaning the widening has slowed.
On Velqorena, histogram bars are drawn stronger when they are growing and lighter when shrinking, to make changes in pace easy to spot.
Why it lags twice
MACD is built from EMAs, and the signal line averages MACD again. Every crossing therefore arrives after the price move that caused it. That makes MACD a useful description of momentum shifts and a poor timing device.
Units matter
MACD is measured in price units. A value of 150 on BTC/USDT and 0.002 on DOGE/USDT can mean similar things. Compare MACD with its own history on the same symbol, not across symbols.
Velqorena articles explain how tools work using past price data. They are not investment advice and do not suggest any trade.