MACD Definition
The MACD, or Moving Average Convergence/Divergence, is a technical indicator used to detect swings in the price of securities, such as stocks or futures. The MACD is computed using two exponentially smoothed moving averages of the security's historical price, and is usually shown over a period of time on a chart. By then comparing the MACD to its own moving average (usually called the "signal line"), traders believe they can detect when the security is likely to rise or fall. MACD is frequently used in conjunction with other technical indicators such as the relative strength index and Lane’s Stochastics.