I'll explain each method in this post, look at cases in which it works (or doesn't work), and then show you with data exactly how well each trading method works when you add up the successes & failures in different markets. There are 4 main ways to use MACD when trading. This implies that the market's downwards momentum is very strong. The lower the MACD histogram, the more the MACD Line is below the Signal Line.This implies that the market's upwards momentum is extremely strong. The higher the MACD histogram, the more the MACD Line is above the Signal Line.Meanwhile, the Signal Line is just a smoothed average of the MACD Line, and the MACD histogram is just the difference between the two. The stronger the trend, the more the market's 12 ema will be away from its 26 ema. In essence, the MACD Line shows you how strong the market's short term uptrend or downtrend is. *All market charts in this post are courtesy from TradingView. *These settings (12 day ema and 26 day ema) can be customized to whatever you want, but 12 and 26 are the default settings.
MACD histogram: MACD Line minus the Signal Line. Signal Line: 9 day exponential moving average of the MACD line. 
MACD Line: market's 12 day exponential moving average minus the market's 26 day exponential moving average. MACD can be applied to any time frame: hourly charts, daily charts, weekly charts, and monthly charts. The name implies that this indicator looks for the relative strength between 2 moving averages to identify how strong (or weak) the market's momentum is. MACD is shorthand for "moving average convergence divergence" and was developed and popularized by Gerald Appel in the 1970s. What is the best MACD settings for various markets and various time frames? Here's the data and proof. 
How useful is this indicator? Let's look at the data and facts instead of hoping and praying that this indicator "works". But unlike other guides online, I won't just show you how to use this indicator in a generic way and how well it "works" (only showing you the successful trades while sweeping the failures under the rug). The MACD indicator (Moving Average Convergence Divergence) is a momentum and trend following indicator that demonstrates the strength of the market's momentum.
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