Acronym for Moving Average Convergence Divergence. A trend-following momentum trading indicator used in technical analysis of an asset’s price to try and forecast its future. It is designed to reveal changes in the strength, direction, momentum, and duration of a trend in an asset’s price.

MACD is calculated by subtracting the long-term Exponential Moving Average (EMA) which is 26 periods from the short-term EMA (12 periods).

MACD = 12-Period EMA − 26-Period EMA

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