# Moving Average Convergence/Divergence

## Description

Moving average convergence/divergence(MACD) indicator graphically describes the mathematical difference between fast and slow exponential moving averages. The third line is called a “signal line”. Common periods of moving averages are: 26 for a slow EMA, 12 for a fast and 9 for a signal line.

![](https://1574671354-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FQAglKSOJnxCrGxFyuplO%2Fuploads%2Fgit-blob-d154cc6d69b140159eae114b1f2d8cceaf0ed24a%2Fscreenshot_4.png?alt=media)

## Formula

Fast EMA - Slow EMA

## Most useful cases

* **Divergence/Convergence** - Divergence/Convergence pattern is a form of price action when new high(low) on the price scale not confirmed with a new high of MACD. Such price and indicator’s behavior can be interpreted as the weakness of current existing trend.

![](https://1574671354-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FQAglKSOJnxCrGxFyuplO%2Fuploads%2Fgit-blob-7d24aa234a2226c84d4b2d06ab84bcbf8008e0f8%2Fscreenshot_3.png?alt=media)

* **Crossover** - Crossover pattern occurs when MACD value crosses the signal line upward or downward. This signal can be used as a trigger to open buy/sell position.
* **Crossing zero line** - this is a trend reversing signal and it can be very useful in case of determining a correction of existing trend, beginning of a new trend wave or starting a new trend.
