# MACD - Moving Average Convergence / Divergence

Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price.

The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. Moving average convergence divergence (MACD) indicators can be interpreted in several ways, but the more common methods are crossovers, divergences, and rapid rises/falls.

**Within this indicator, what strategy does Anny offer?**

1. MACD crossing over the signal line

3. MACD trend reversal (divergent price peaks)

**1. MACD crossing over the signal line **

**Logic of the algorithm:**

- For long signals the algorithm scans for a cross-over of the MACD line over the signal line occurring below the histogram line.
- For short signals the algorithm scans for a cross-under of the MACD line over the signal line occurring above the histogram line.

**Configuration:**

- The configuration is pre-set to use 1-hour candles for the chart, and the algorithm recommends not going below 30-minute candles for better accuracy.

**2. MACD trend convergence**

**Logic of the algorithm:**

- Identifies if the last entries of the histogram represent an uptrend.
- Evaluates if the signal line is within the histogram.
- Evaluate if the price peaks of the histogram favor the trend.

**Configuration:**

- The configuration is pre-set to use 1-hour candles for the chart.

**3. MACD trend reversal (divergent price peaks)**

**Logic of the algorithm:**

- Identifies if the last 2 entries of the histogram are trending up and if before that, there's a meaningful downtrend block.
- Evaluates if the signal line falls outside the histogram.
- Evaluates if the price peaks of the histogram are against the trend.

**Configuration:**

- The configuration is pre-set to use 1-hour candles for the chart.

**Hints💡**

- For an additional confirmation, traders can consider combining the MACD strategy with another indicator. Using multiple indicators can enhance the accuracy of the signals and provide more robust trading decisions. It's essential to choose indicators that complement each other and align with the trader's trading strategy and risk tolerance.