# 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://3544171604-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-LvquTYs4Kw8odYPu7JS%2F-LvqvlZAGmY-zeltmwwG%2F-LvqvnXGe-tT0ocfPGJl%2Fscreenshot_4.png?generation=1576100911735358\&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://3544171604-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-LvquTYs4Kw8odYPu7JS%2F-LvqvlZAGmY-zeltmwwG%2F-LvqvnXKbuPYt2dJvH9M%2Fscreenshot_3.png?generation=1576100912994649\&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.


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