MACD, and the cross it will not announce
Reported only on a cross that is both recent and materially separated from zero — measured in ATR, never against the histogram's own typical size.
- Assumes:
- The basics of this family
- Markets:
- Crypto · Equities · Indices
- Timeframes:
- 1h · 4h · 1d
What it means
MACD is the difference between a fast and a slow exponential moving average, with a signal line that is itself a moving average of that difference. The histogram is the gap between the two, and it changes sign when they cross.
Everything else MACD says at a given moment — above signal, below signal — is true almost all of the time and therefore carries no information. The cross is the one moment it says something new.
How we detect it
The engine reports MACD only when the histogram has changed sign within the last five bars AND the histogram now sits at least a quarter of one ATR away from zero. Both conditions, or nothing.
It says nothing on the bar the cross happens, because a cross IS the histogram at zero, and announcing it there announces a coin still in the air. It becomes an observation once it has separated.
Materiality is measured in ATR and never against the histogram's own median. The median version was implemented and is wrong: in a market that chops gently forever, every histogram value is small, so the median is small too and every hairline flip clears half of normal. Normalising by the series' own histogram normalises away precisely the difference between a momentum turn and noise.
When the read carries information
- There is enough history for the moving averages and for a normal histogram size to exist at all — thirty bars of defined histogram is the floor.
- The instrument's ATR is a fair description of its current movement, since the materiality test is denominated in it.
- The cross is being read as a description of recent momentum rather than as an event with a consequence attached.
When it misleads
- In a choppy market the histogram crosses often; most of those crosses fail the materiality test and are never reported, which means our silence is not the same as an absence of crosses.
- A trend that accelerates without a cross produces no MACD report at all, however dramatic the move.
- Five bars is a short freshness window by design. A cross that separated slowly is history by the time it is material, and this engine will not mention it.
How it reaches you
When MACD is unsupported, the reason is available and is used to say that momentum was examined and had nothing to add.
The traditional names for these crosses carry a direction and a promise. This publication reports the cross and its separation, and makes no promise.
Worked example
No worked example is shown here. Display rights over the market data a real example would use have not been established, and an unanswered rights question is treated as a refusal.
Outstanding before an example can be shown
- Display rights over the underlying data have not been established.
- No data source has been selected for it.
- No freshness terms cover the data it would use.
- The example has not been made: no fixture, no figure, no asset review.
- Its caption and image description do not exist in both published languages.
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