# 📈 MACD – Moving Average Convergence Divergence

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**MACD** is a momentum + trend-following indicator.\
It helps spot **trend changes** and **market momentum** — very useful in both bull and bear markets.

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### 🧠 Simple Definition

MACD tracks the relationship between two **moving averages** of price:

* A fast-moving average (usually **EMA 12**)
* A slow-moving average (usually **EMA 26**)

MACD turns this into **lines** and a **histogram** that show if the momentum is growing or fading.

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### 📊 What You See on a MACD Chart

1️⃣ **MACD Line** → difference between EMA-12 and EMA-26\
2️⃣ **Signal Line** → EMA-9 of the MACD line\
3️⃣ **Histogram** → shows the distance between MACD Line & Signal Line

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### 🔍 How to Read It

* **MACD Line crosses above Signal Line** → **Bullish crossover** → Buy signal
* **MACD Line crosses below Signal Line** → **Bearish crossover** → Sell signal
* **Histogram grows bigger** → Momentum is strengthening
* **Histogram shrinks** → Momentum is weakening

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### 📈 Visual Example (Suggested Visual)

<figure><img src="https://4037061125-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FHI9tQPN2ZbRA9yfm9Hjr%2Fuploads%2FVrad5abaULZjN71xjbJN%2Fimage.png?alt=media&#x26;token=ac8f4fb4-b6f3-4eef-a4c8-602f85a7599d" alt=""><figcaption></figcaption></figure>

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### 📊 Why MACD is Powerful

✅ Combines **trend** and **momentum**\
✅ Works well on **all timeframes**\
✅ Helps confirm signals from other indicators (like RSI or EMAs)

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### 🤖 How Mandalyze AI Uses MACD

Mandalyze AI detects:

* MACD crossovers
* Momentum buildup (rising histogram)
* Momentum fading (shrinking histogram)
* Bullish or bearish divergence with price

Example output:

> “ETH MACD bullish crossover detected on 4h chart — growing momentum.”

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### ⚠️ Pro Tips

* **Don’t trade just one crossover** — combine with trendlines or support/resistance.
* Strong trends may keep MACD bullish/bearish for **extended periods** — don't fight the trend!

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### 🧪 In Summary

MACD helps you see **how strong a trend is** — and whether momentum is about to shift.

> 📌 Master MACD + RSI combo = powerful edge for any trader.

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> 🧭 Next Lesson: Bollinger Bands – Volatility & Mean Reversion
