What does it measure?
MACD examines momentum through the difference between fast and slow moving averages. A common setting is 12, 26, 9; settings can vary.
How to read it
Distinguish signal-line crosses, position relative to zero and changes in histogram size. The histogram equals MACD minus its signal line.
MACD = EMA(12) − EMA(26); signal = EMA(MACD, 9)Hypothetical calculation
A fast EMA of 102 and slow EMA of 100 give MACD=2. With a signal line at 1.5, the histogram is 0.5—not a forecast of a 0.5% price gain.
Before using it
Moving averages introduce lag. Sideways markets can generate repeated crosses. Different timeframes on the same symbol can show different conditions.
Check on your chart
Keep the symbol and timeframe fixed and record your settings. Compare an updating bar with a closed bar. This exercise is not a trade recommendation.
Can momentum improve while the histogram is negative?
Yes. If MACD is −1 and the signal line is −0.5, the histogram is −0.5. Later MACD −0.6 with signal −0.4 gives −0.2. The negative gap narrowed in this hypothetical example, but the histogram has not crossed zero. MACD crossing its signal line, MACD crossing zero and a price increase are different observations. None alone guarantees a trade outcome.