# Moving Average Convergence Divergence (MACD)

> MACD (Moving Average Convergence/Divergence) identifies trend strength, direction, and reversal points — one of the most popular filters in Veles bots.

**MACD (Moving Average Convergence/Divergence)** is one of the most popular technical analysis indicators.
It is used to determine the strength and direction of a trend, as well as potential reversal points.

## How the MACD Is Calculated

- **MACD Line** = EMA(12) − EMA(26)
- **Signal Line** = EMA(9) of the MACD Line
- **Histogram** = the difference between the MACD Line and the Signal Line

Thus, the MACD combines the properties of both a trend indicator (Moving Averages) and an oscillator (a histogram of fluctuations around zero).

## MACD Signals

### 1. Zero Line Crossover

- **MACD crosses zero from below to above** → signal to open a Long deal.
- **MACD crosses zero from above to below** → signal to open a Short deal.

### 2. MACD and Signal Line Crossover

- **MACD crosses the signal line from bottom to top** → Buy-signal (open Long).
- **MACD crosses the signal line from top to bottom** → Sell-signal (open Short).

### 3. Histogram Trend Change

- **The histogram changes from negative to positive** → Buy-signal (open Long).
- **The histogram changes from positive to negative** → Sell-signal (open Short).

## MACD in Veles Bots

- The **"MACD Histogram Trend"** indicator provides a signal as long as a specific trend persists (as long as the histogram bars are the same color):
	- **Histogram is in the green zone** → Buy-signal (open Long).
	- **Histogram is in the red zone** → Sell-signal (open Short).
- The **"Reverse Signal"** option is available for the MACD — you can use standard Long-signals to open or to average a Short deal (and vice versa).
- The higher the timeframe, the more reliable the signals, as shorter timeframes result in more market noise.

## Limitations

- MACD is a lagging indicator, meaning signals are generated only after a movement has already begun.
- On a flat market, the MACD can generate many false signals.
- For increased accuracy, it's best used in combination with RSI, support/resistance levels, or volume filters.

## Using in Veles Bots (Flexible Indicator)

The indicator is available as three arguments, each of which can be used to set conditions:

- MACD - MACD line.
- MACD (Signal) - signal line.
- MACD (Trend) - the difference between the MACD line and the signal line (histogram).

Available settings:
- FastLength - the length of the fast EMA used in the formula. Range: 2–500, default 12.
- SlowLength - the length of the slow EMA used in the formula. Range: 10–500, default 26.
- Period - the length of the signal EMA used in the formula. Range: 2–500, default 9 (for MACD Signal and MACD Trend).
- Interval - the candle timeframe.
- Method - the calculation type. By bar close (only on the selected interval) or by minute (once per minute for any interval).
- Shift - shifts the requested indicator value back by the specified number of candles.

## Summary

MACD is one of the most versatile indicators available — combining trend detection with momentum measurement in a single tool. In Veles bots, the MACD Histogram Trend filter provides clean directional signals that work especially well on higher timeframes and in combination with volume or RSI filters.