Macd: The MACD indicator

The MACD indicator, also known as the MACD oscillator, is one of the most popular technical analysis tools. There are three main components of the MACD shown in the picture below: MACD (Moving Average Convergence Divergence) is a popular technical indicator used in the stock market to identify trends and potential buy or sell signals. Learn to use the MACD indicator in 2025 with this beginner-friendly guide. Learn to decode market trends and momentum with crossovers, divergences, and practical tips. Updated March 2025 with examples and tools to help new traders boost skills and trade smarter, combine with other indicators for best results! The MACD can be classified as an absolute price oscillator (APO), because it deals with the actual prices of moving averages rather than percentage changes. A percentage price oscillator (PPO), on the other hand, computes the difference between two moving averages of price divided by the longer moving average value. While an APO will show greater levels for higher priced securities and smaller levels for lower priced securities, a PPO calculates changes relative to price. Subsequently, a PPO ...