MACD + RSI/MA Signals with 200 EMA (Overlay)

MACD (Moving Average Convergence Divergence) is a momentum + trend-following indicator that traders use to spot when momentum is shifting in or out of a trend. It’s built from moving averages but is more about the relationship between them than just the averages themselves.

How It’s Built

MACD Line = EMA(12) – EMA(26)
→ Short-term vs. medium-term momentum.

Signal Line = EMA(9) of MACD Line
→ Smooths things out.

Histogram = MACD Line – Signal Line
→ Visual "energy gauge" showing momentum strength.

What It Actually Tells You

Crossover Signals

MACD Line crosses above Signal Line → Bullish shift (momentum turning up).

MACD Line crosses below Signal Line → Bearish shift (momentum turning down).
⚠️ But: crossovers lag price. On their own, they’re late.

Zero Line Relevance

Above Zero → Trend bias is bullish (short-term EMA > long-term EMA).

Below Zero → Trend bias is bearish.

Crosses through zero often align with bigger trend changes.

Histogram Use

Expanding histogram = momentum strengthening.

Shrinking histogram = momentum weakening (trend may be stalling).

Flips from positive to negative (or vice versa) often precede crossovers.

Divergences

Price makes a new high, but MACD doesn’t → momentum is fading → possible reversal.

Same idea for lows.

Where Traders Go Wrong

Using it alone. It’s a confirmation tool, not an entry machine.

Misreading every crossover as a trade. Many are just noise, especially on low timeframes.

Forgetting market context — MACD works best in trending markets, not chop.

Best Way to Use It

With trend structure + support/resistance:
→ E.g., you’re eyeing a BTC bounce long. If MACD histogram turns from negative to positive while price defends support, that’s confirmation, not a blind buy.

For momentum timing:
→ Ride trends longer if histogram stays strong. Scale out when it weakens.

Divergence spotting:
→ Early heads-up that a reversal is brewing.