MACD indicator, which stands for Moving Average Convergence / Divergence, is a technical analysis indicator created by Gerald Appel in the 1960s. It shows the difference between a fast and slow exponential moving average (EMA) of closing prices. During the 1980's MACD proved to be a valuable tool for any trader. With the emergence of computerized analysis, it has become highly unreliable in the modern era.

Watch the example graph below. The upper graph is the prices. The lower graph has the MACD indicator line in blue and the signal line in red. The solid white histogram style is the difference between them.

MACD Crossover.  The most commonly discussed way to use the MACD indicator is to buy the instrument being charted when the fast line crosses above the signal line (bullish crossover) and sell (or short) it when the fast line crosses below the signal line (bearish crossover). 

The MACD Indicator is very useful when used in its convergence-divergence role.