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MACD zero line cross

The moment MACD crosses zero, which happens exactly when the fast moving average crosses the slow one.

A zero crossing is arithmetically identical to a moving-average-crossover between the 12 and 26 period averages. The MACD line is their difference, so it is zero when they are equal.

That makes it a slower and more conservative signal than a macd-signal-line cross, and traders often use the zero line as a regime filter: only take long signals while MACD is above zero.

Being equivalent to a crossover, it inherits every weakness of one, notably repeated flips in consolidation. Understanding that these are the same event under two names is a good antidote to stacking both on a chart and believing they confirm each other.

Related: macd, moving-average-crossover, macd-signal-line, consolidation, whipsaw

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.
A fast and a slow moving average crossingA jagged price line with two smoother average lines through it; the fast average dips below the slow one on the left and cuts back above it in the middle, where a circle marks the crossing.pricefast averageslow averagefast crosses belowfast crosses abovethe slow averageAverages of recent closes; the fast one reacts sooner than the slow one.
Fast and slow moving averages crossing. A moving average is the average of the last few closing prices, redrawn each period. An average over fewer periods turns sooner than one over many, so the two lines cross whenever the recent pace of the market changes.

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