MACD, or Moving Average Convergence/Divergence, is a well-known and often used indicator either in the crypto niche or with traditional markets. It was invented by Gerald Appel in the late 70s to trade stocks. After 50 years since its invention, though, it’s still popular in traditional trading and now in crypto trading, too.
There are two MACD modifications: a linear MACD and a MACD histogram.
A linear MACD consists of two lines: a MACD line (blue in the customized chart up above) and a MACD signal line (orange in the customized chart up above). It all depends on your custom settings, but a MACD line is usually a 12-period EMA (exponential moving average) minus 26-period EMA. A MACD signal line is, as a rule of a thumb, a 9-period EMA. The signal for trend changing and thus a potential good time to buy or sell takes place when those two lines cross, where a potential good time to buy is when the MACD line crosses the MACD signal line from below. It gives you a sell signal when the MACD line crosses the signal line from above.
A MACD histogram is a graphic representation of a simple formula, the MACD signal line minus the MACD line. When the MACD line is above the MACD signal line, then the histogram is positive. When the MACD line is below the MACD signal line, then the histogram is negative. You should, however, note that no matter if the value of the histogram is above or below zero, when the histogram is growing, it might be a start of the accelerating bullish trend. And vice versa, once the histogram is shrinking, it might be a start of a bearish trend.
MACD Indicator works on a 5-minute timeframe and searches for entries when there is a cross of the lines as shown in the screenshot