MACD's Three Readings Tested: 2,052 Settings on USD/JPY

MACD is the gap between two exponential moving averages, drawn as a line under the price chart. Fast 12, slow 26, signal 9 are so widely used that most platforms ship them as the default, and the pane shows three things: the MACD line, its signal line, and a histogram.

Three trading rules go with it. The MACD line crossing its signal line, the MACD line crossing zero, and the histogram turning. Formiq's backtester lists all three as readings, so the plan was to measure each of them.

They are three different rules, and their characters are opposites. The histogram turn won more than half its trades in all 57 settings on the 1-hour chart, and 41 of those settings still finished the year negative. The signal-line cross won between 33.54% and 40.46% and finished 2024 and 2025 in profit in all 57. The zero-line cross produced identical trades to a plain EMA crossover in all 228 runs.

signal crosshistogramzero crossthe histogram has the highest win rate and is negative in all three

What MACD measures

Three steps:

1. MACD line = fast EMA − slow EMA (12 and 26 by default)
2. Signal line = an EMA of the MACD line (9 by default)
3. Histogram = MACD line − signal line

The first line is the whole indicator. It is a difference between two averages, so it is positive when the fast average sits above the slow one. The units are price units: on USD/JPY it says how many sen apart the two averages are.

Half the results below are already decided by those three lines.

The histogram turn enters before the crossing

The histogram is the MACD line minus the signal line, so the bar where it crosses zero is the bar where the MACD line crosses its signal line. Read as a crossing, the histogram is the signal-line cross with a different picture in front of you.

The turn is somewhere else. It is the bar where a falling histogram stops falling while it is still below zero: three bars, a trough for a buy and a peak for a sell. It completes before zero is reached, so it anticipates the crossing.

The three readings on the 1-hour chart in 2025, all at 12/26/9:

The reading with the highest win rate has the smallest average win. The turn collects 46.71 pips and gives back 56.78, the only one of the three whose losses are the larger side. Entering early means the opposite turn arrives and closes the position before the move has extended.

The zero-line cross is an EMA crossover

The MACD line is the fast EMA minus the slow EMA. So the MACD line crossing above zero is the fast EMA crossing above the slow EMA — an ordinary golden cross, with the subtraction done for you.

The same 19 period pairs were run twice: once as a MACD zero-line cross, once through the moving-average rule with both averages set to EMA.

No difference there either. A strategy built on the MACD zero line is a moving-average crossover strategy that carries an extra indicator.

This is the fifth time in this series that an indicator's rule turned out to be another indicator: the CCI zero cross, the psychological line, Heikin-Ashi candles and moving-average disparity came first.

Three readings, one of them another indicator

Two conditions here belong to the MACD: the signal-line cross and the histogram turn. The zero-line numbers are reported alongside them, but they are also the numbers for an EMA crossover.

MACD settings and how to read them

Where it appears

Not on the candles. A separate pane opens below the price chart with three things drawn in it:

• MACD line (blue by default)
• Signal line (orange by default)
• Histogram, coloured differently above and below zero (green up, red down by default)

Zero is the reference level. MT4's built-in MACD is built differently. It computes the signal line with a simple moving average and draws the MACD line itself as the histogram, so it does not look like this one. The three steps above are what this article and TradingView's MACD use.

The settings dialog

The backtester adds a reading: signal-line cross, zero-line cross, or histogram.

The signal period is inert under one of the readings

A rule that never looks at the signal line cannot be changed by the signal period. Here are the 57 settings on the 1-hour chart in 2025, grouped by signal period, as medians.

The right-hand column is the same value three times. On the 15-minute chart all three rows give +1,531.0 pips over 861 trades, and on the 4-hour chart all three give −1,290.0 pips over 66 trades. Choosing the zero-line reading retires one of the three numbers the dialog lets you set.

The signal period does reach the two readings that use the signal line, and what it changes is frequency: the crossing takes 614 trades at a signal of 5 against 408 at 14.

The published rules and the conditions tested here

Positions are held until the opposite signal. Stops and targets are measured separately further down.

How this was measured

2,052 runs in total: 57 settings x 3 readings x 3 timeframes x 4 period windows (2024, 2025, and the two halves of 2025).

The timeframe reverses the answer

For each reading and timeframe, here is how many of the 57 settings finished both 2024 and 2025 in profit.

The signal-line cross put all 57 settings in profit across both years on the 1-hour chart, and only 10 of 57 on the 15-minute. The 15-minute median for 2024 is negative, so more than half of those settings spent the year losing money.

The histogram turn has the highest mean win rate of the three readings on every chart, and reached both years in profit in 0 of 57 settings on the 15-minute and 1 of 57 on the 1-hour. Only the 4-hour recovers to 19 of 57, and its 2025 median is still −401.6 pips.

The zero-line cross runs the other way: 54 of 57 on the 15-minute chart, none at all on the 4-hour. Its 4-hour numbers are the largest of any cell in 2024 at +2,398.0 pips and negative in 2025 at −1,290.0 pips.

Trade counts explain part of that. The 4-hour zero-line cross takes 66 trades a year. USD/JPY rose 1,632.5 pips over 2024, so a small number of trades could catch a lot of it. 2025 opened at 157.23 and closed at 156.67, which is −55.7 pips for anyone holding. A rule that trades 66 times a year mostly inherits the direction of the year.

The 1-hour signal-line cross takes 501 trades on average and still returned a median +1,972.5 pips in the year that finished where it started.

12/26/9 is not a special setting

Here is the default measured against the other 56, with its rank in each cell.

Every rank is out of 57. The same 12/26/9 placed 2nd in 2024 on the 1-hour signal-line cross and 50th in 2024 on the 1-hour zero-line cross. On the 1-hour histogram turn it went from 2nd in 2025 at +761.1 pips to 49th in 2024 at −1,966.7. On the 4-hour zero-line cross it placed 53rd in 2025 and lost 2,089.3 pips.

On the 15-minute signal-line cross its 2024 rank of 29th is the median of the 57, which is another way of saying the default was neither good nor bad there.

Fix the timeframe and the reading before arguing about the periods. Copying someone else's 12/26/9 does not reproduce their trades.

A faster fast period returned more

The 57 settings on the 1-hour signal-line cross, grouped by fast period, as 2025 medians. Every slow and signal period is present in each group.

The order is clean, and no group fails: every fast period put all of its settings in profit across both years.

The slow period does not order itself the same way.

It falls to 35 and recovers at 52 while trade counts keep falling, so frequency alone does not account for it. This aggregation cannot identify the reason.

Taking each year's best setting into the other year

For each timeframe, the setting with the highest annual pips in one year, run unchanged in the other. Signal-line cross.

Ranks are out of 57. Five of the six fell from 1st to somewhere between 9th and 51st. The 1-hour winner of 2025, 8/17/5, placed 51st in 2024, and still made 1,450.5 pips there.

Because all 57 settings on the 1-hour signal-line cross were profitable in both years, drawing the worst one still leaves you in profit. Losing the ranking and losing money are two different failures, and only the first happened in that cell.

The 15-minute chart is not like that. Its 2025 winner, 16/52/5, lost 1,025.3 pips in 2024, so a bad pick there changes the sign.

The signal-line cross holds every win rate near 37%

The 57 settings on the 1-hour chart in 2025 have win rates between 33.54% and 40.46%. All 57 finished in profit while winning fewer than half their trades.

The best, middle and worst by annual pips:

"Per trade" is the win rate applied to the average win and loss. Multiply it by the trade count and you land on the year: 723 trades at 4.67 pips is about 3,376 pips against a measured +3,376.8.

All three win rates round to 37%, and their order runs backwards against the pips. The worst performer, 24/26/14, has both the highest win rate and the largest average win at 77.17 pips.

Two separate things divide them. The top two earn almost the same per trade, 4.67 and 4.84 pips, so their gap in annual pips is a gap in frequency: 723 trades against 407. The bottom one earns 1.98 pips per trade, less than half of either. Its ratio of average win to average loss is 1.80 against 2.08 and 2.19, falling in the same order as the annual pips.

Drawdown does not follow frequency: the 316-trade setting has the deepest at 1,440.5 pips and the 407-trade setting the shallowest at 829.2.

Filters, stops and cost

All measured on the 1-hour chart with 12/26/9 on the signal-line cross. Unfiltered, that setting took 451 trades for +2,223.6 pips in 2025 and 423 trades for +3,152.1 pips in 2024.

The ADX filter fails for the fifth time

Only trading while ADX sits above a level, at four levels:

Every level cuts 451 trades down to between 28 and 59. ADX above 15 beats the unfiltered rule in 2025 at +2,435.1 pips and loses 2,061.5 pips in 2024. No level improved both years. This series has now tried an ADX filter five times with the same outcome each time.

Trade counts rise with the level rather than falling: 28, 50, 57, 59 in 2025. The same condition gates both entries and exits, so a stricter filter changes where positions are closed as well as opened, but this aggregation cannot identify the reason.

Stops and targets

Figures are pips. A 60-pip target alone lifts the win rate from 38.58% to 43.46% and drops the year from +2,223.6 to +1,570.3 pips. On a rule whose average win is 56 to 77 pips, capping wins at 60 removes the part that pays for the losses.

Only stop 50 with target 100 stayed near the unfiltered result in both years, and even that gave up over 300 pips in 2025.

Cost

The same trades at different spreads, 2025, 451 trades:

Each extra pip of spread costs 451 pips, which is the trade count. As with every other indicator in this series, the spread bill is trades times spread.

Dividing the zero-spread result of +2,358.9 pips by 451 trades gives 5.2 pips per trade, so the setting turns negative once the spread passes 5.2 pips.

The more a setting trades, the less room it has. The same 12/26/9 on the 15-minute signal-line cross took 1,938 trades in 2025, and the same calculation puts its break-even spread at 0.86 pips. Dropping one timeframe cuts the spread it can absorb by a factor of six.

Related reading

• Moving Average Crossover Settings Compared: the same trades as this article's zero-line cross, measured from the moving-average side
• SMA vs EMA: Which Moving Average Is More Profitable? 672 Tests: the exponential average MACD is built from, against the other ways of averaging
• OsMA Settings Compared: the gap between the MACD line and its signal line, promoted to an indicator of its own
• CCI Settings Compared: the first time a zero-line cross turned out to be a moving-average cross
• Moving Average Disparity Settings Compared: the fourth
• Do Indicator Settings Transfer Between Pairs? 3,024 Tests: this setting won the hourly chart on USD/JPY in 2024 with +3,152.1 pips and lost money on all three other pairs

Notes

USD/JPY only, over 2024 and 2025. Fills are at the close with a fixed 0.3 pip spread and no slippage, so live fills and commissions will differ.

USD/JPY opened 2024 at 140.87 and closed at 157.20, which is +1,632.5 pips for anyone simply holding, so trend-following rules had a favourable stretch in the sample. 2025 opened at 157.23 and closed at 156.67 for −55.7 pips, with a high-to-low range of 1,899.5 pips.

The two identity checks compared trade counts, win rates and annual pips between rules run over the same period on the same fill terms. They did not match trades one by one.