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MACD signal line

The 9 period exponential average of the MACD line, whose crossings with MACD are the indicator's most commonly traded trigger.

macd itself is the difference between a 12 and 26 period exponential-moving-average. The signal line smooths that difference again, so a crossover means the momentum difference has turned relative to its own recent average.

Crossovers above zero are conventionally treated as stronger than those below, because they occur while the longer-term trend is still positive.

This is a third-order lag: an average of an average of an average of price. In ranges it flips constantly and produces whipsaw; in trends it can cross several times during a single healthy pullback. Most traders who use it profitably do so as a filter combined with structure, not as a standalone trigger.

Related: macd, macd-histogram, macd-zero-line-cross, signal-line, indicator-lag

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

MACD line, signal line and histogram under a price chartA price line above a lower panel holding two curves and a bar histogram measured from a zero line, with the point where the faster curve rises through the slower one circled.PRICEMACD (12, 26, 9)0signalMACDbullishcrossover
MACD, signal line and histogram. The MACD line is the gap between a fast and a slow moving average, and the signal line is a smoothed copy of it. The bars show the distance between the two, and the circle marks where the faster line rises through the slower one.

Educational only, not advice. Spotted an error? Post in Site Feedback.