MACD: the indicator and the strategy you can automate.

The MACD looks intimidating at first — three elements, two numbers, a histogram — but the core idea is simple: it measures whether the trend is speeding up or slowing down, by comparing two moving averages. After this guide you will understand every part and have the code to automate the classic strategy.

01What the MACD is

MACD stands for Moving Average Convergence Divergence , created by Gerald Appel in the late 1970s. It is a trend indicator and a momentum indicator at the same time. It has three components:

• MACD line: the difference between the 12-period exponential moving average (EMA) and the 26-period one. When the fast one is above the slow one, it is positive (bullish momentum).
• Signal line: a 9-period EMA of the MACD line itself. It works as the trigger.
• Histogram: the difference between the MACD line and the signal line. It shows the strength of the move visually.

02The MACD signals

1. Line crossover (the classic)

The most used signal: when the MACD line crosses above the signal line → buy. When it crosses below → sell. It is the basis of the strategy you can automate.

2. Zero line crossover

When the MACD line crosses above zero, the fast average has passed the slow one — confirmation of an uptrend. Below zero, a downtrend. Slower, but more reliable than the line crossover.

3. Histogram

The histogram grows when momentum speeds up and shrinks when it slows down. A shrinking histogram (even while still positive) warns that the rally is losing strength — it anticipates the crossover.

4. Divergences

As with the RSI, divergence between price and MACD is powerful: price makes a higher high, the MACD makes a lower high → weakening, possible reversal.

03Coding the MACD

//@version=5
strategy("MACD Cruzamento", overlay=false)

rapida = input.int(12, "EMA Rápida")
lenta  = input.int(26, "EMA Lenta")
sinal  = input.int(9,  "Linha de Sinal")

[macdLine, signalLine, hist] = ta.macd(close, rapida, lenta, sinal)

plot(macdLine, "MACD", color=color.blue)
plot(signalLine, "Sinal", color=color.orange)
plot(hist, "Histograma", style=plot.style_histogram,
     color=hist >= 0 ? color.green : color.red)

// strategy: line crossover
if ta.crossover(macdLine, signalLine)
    strategy.entry("Compra", strategy.long)
if ta.crossunder(macdLine, signalLine)
    strategy.close("Compra")

import pandas as pd

def calcular_macd(precos, rapida=12, lenta=26, sinal=9):
    ema_rapida = precos.ewm(span=rapida, adjust=False).mean()
    ema_lenta  = precos.ewm(span=lenta,  adjust=False).mean()
    macd_line   = ema_rapida - ema_lenta
    signal_line = macd_line.ewm(span=sinal, adjust=False).mean()
    histograma  = macd_line - signal_line
    return macd_line, signal_line, histograma

macd, sinal_l, hist = calcular_macd(df["close"])

# detects a bullish crossover on the last candle
cruzou_cima = (macd.iloc[-2] < sinal_l.iloc[-2]) and \
              (macd.iloc[-1] > sinal_l.iloc[-1])
if cruzou_cima:
    print("MACD cruzou pra cima — sinal de compra")

04Improving the strategy

A pure MACD crossover produces a lot of false signals. Filters that help a lot:

• Trend filter: only buy if price is above the 200 moving average and the MACD has crossed up.
• Zero line filter: only validate the crossover if it happens above zero (already in an uptrend).
• RSI confirmation: MACD crossover + RSI above 50 = a stronger signal.

05Frequently asked questions