MACD is the difference between a fast EMA (typically 12-period) and a slow EMA (typically 26-period). A "signal line," usually a 9-period EMA of the MACD line itself, is plotted alongside it. A MACD crossing above its signal line is read as a bullish momentum shift, crossing below as bearish.
Because it's built from two EMAs, MACD is essentially a smoothed, momentum-flavored version of a moving-average crossover. It reacts a bit faster to genuine shifts than watching the raw MAs directly, since it's tracking the rate of change in their relationship, not just their relative position.
It's a widely-used building block in rule-based systems (including as a selectable signal in zengtrade's Strategy Builder) precisely because it's transparent: the calculation is fully known, with no hidden parameters.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.