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What Is MACD

MACD is the distance between a twelve-day average and a twenty-six-day one, drawn as a line of its own under the chart, with a nine-day average of that line called the signal and bars for the difference between the two. This paper shows you the two averages and their gap on the euro's real daily closes of 2025, the idea as a caliper measuring the gap, MACD in its box under the daily chart, the three numbers it gives for one day, and the dialog that adds it on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Two averages, and the gap between them

MACD is the distance between two moving averages, drawn as a line of its own. The two are exponential averages of twelve and twenty-six days — the blue and gold lines over the euro's closes. On 1 July 2025 the fast one stood at 1.16425 and the slow one at 1.15352, so the gap was 0.01072, or 107 pips — a pip being the fourth decimal place, the smallest step most people count in. Work that gap out for every day and draw it, and you have the MACD line.

A caliper

The picture is a caliper set between two lines. Its jaws sit on the fast average and the slow one, and the reading on its scale is the gap between them, not the lines themselves. When the price runs, the fast average pulls away from the slow one and the jaws open. When the run slows, the fast line falls back and the jaws close, and if the price turns, they cross and open the other way. MACD is the caliper's reading, day after day.

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