MACD Components and Exponential Moving Average Formula
Summary
This short note introduces the Moving Average Convergence and Divergence indicator, or MACD, and specifies its inputs: closing prices and fast, slow, and comparison periods. It describes three calculated series. DIF is the difference between the fast and slow exponential moving averages of the close; DEA is an exponential moving average of DIF; and MACD is twice the difference between DIF and DEA.
The document provides the calculation structure but does not explain how to interpret crossovers, histogram values, or trading signals. It gives no parameter values, markets, test results, or evidence of profitability. A referenced explanation of the indicator’s meaning appears to be missing, so readers would need another source to learn how the formula might be used in a strategy or what its limitations are.
Key ideas
- MACD uses closing prices and fast, slow, and comparison periods as inputs.
- DIF is calculated as the difference between fast and slow exponential moving averages.
- DEA is an exponential moving average of DIF.
- The MACD series is twice the difference between DIF and DEA.
- The note does not provide signal interpretation or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.