Understanding signal line crossover vs zero line crossover in MACD
In this Wikipedia article here
They mention:
Zero crossovers provide evidence of a change in the direction of a
trend but less confirmation of its momentum than a signal line
crossover.
If anything , it seems that zero line crossover is more of a confirmation of momentum because it happens later in time than the signal line crossover. SO signal line cross hints at the change in trend, and zero crossover confirms it. Can someone explain the Wikipedia statement?
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The Wikipedia article is correct. You are misunderstanding the difference between the direction of the trend and the momentum of the trend. The signal line crossover is confirmation in a change in the momentum of the trend not necessarily the direction of the trend. So when the signal line crosses the MACD line the trend's momentum is changing from -ve to +ve or vice-versa. The direction of the trend itself may not have changed yet.
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