What Is MACD Line?
MACD Line is the main part of MACD indicator (Moving Average Convergence Divergence), one of the most popular indicators used in technical analysis. In fact, MACD Line is one of the two lines which together make up the MACD – the other is Signal Line, which is an exponential moving average of MACD Line.
MACD Line Calculation
Calculation of the MACD Line’s value is straightforward. Take two exponential moving averages (EMA) of closing price with different period lengths and subtract the value of the longer period average from the value of the shorter period average:
MACD Line Formula
MACD line = Shorter EMA – Longer EMA
MACD and MACD Line Settings
Typically used settings for MACD Line calculation are 12 (Shorter EMA) and 26 (Longer EMA). You can see a detailed discussion about all MACD parameters and the indicator’s sensitivity to the settings: MACD Settings.