# MACD

*Trading & Technical Analysis — Finicade finance glossary*

MACD subtracts a longer moving average from a shorter one and plots the result against a signal line, with crossovers read as momentum shifts.

MACD subtracts a longer exponential moving average from a shorter one and plots the result against a signal line, with the gap between them shown as a histogram. Crossovers are read as momentum shifts. Because it's built entirely from moving averages, it inherits their lag and their weakness in sideways markets — it's a trend indicator wearing an oscillator's clothes.

**Also known as:** moving average convergence divergence, MACD histogram

**Related terms:** [Moving Average](https://finicade.com/glossary/moving-average), [Relative Strength Index (RSI)](https://finicade.com/glossary/rsi), [Divergence](https://finicade.com/glossary/divergence), [Technical Analysis](https://finicade.com/glossary/technical-analysis), [Trend Following](https://finicade.com/glossary/trend-following)

Source: https://finicade.com/glossary/macd