It's used to measure the momentum of a stock and determine when to enter or exit a trade. MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. The signal line is a nine-period EMA of the MACD line. The MACD line and the signal line cross at certain points, which indicate potential entry or exit points. MACD can be used on any time frame, from one minute to long-term investing. It's most effective when prices are trending up or down, and it doesn't work well in sideways markets.