MACD measures the gap between a fast and a slow EMA, then smooths that gap with a third EMA called the signal line. The difference between the gap and the signal is the histogram, which is the most commonly traded value.
Formula
macd_line = EMA(close, fast) - EMA(close, slow)
macd_signal = EMA(macd_line, signal)
macd_hist = macd_line - macd_signalParams
fast- fast EMA period. Default 12.slow- slow EMA period. Default 26.signal- signal-line EMA period. Default 9.
Output
Three columns:
{name}_line- the raw MACD line{name}_signal- the smoothed signal line{name}_hist- the histogram (line - signal)
Common signals
- Histogram crosses zero - momentum flip. Long when hist goes positive, short when it goes negative.
- Line crosses signal - earlier than the zero-cross. Use a
crossovercondition between MACD line and MACD signal line. - Divergence - price makes new high, MACD does not. Classic reversal cue. LucraX does not detect divergence automatically; use a custom condition or wait for a manual flag.
Pitfalls
- Default 12/26/9 is calibrated for daily bars. On intraday timeframes you may want to scale up. There's no universal rule - backtest the variant.
- MACD lags by design because it's built on EMAs. In choppy markets the histogram flips frequently and produces whipsaws. Combine with a regime filter like ADX.