MACD is the abbreviation of moving average convergence and divergence. It analyzes the turning point of the trend by calculating the difference of moving averages in different periods. MACD passivation is based on the original MACD index, which reduces the volatility of MACD curve by increasing the average line, making the index more stable and reliable, and making it easier to analyze market trends.

The process of MACD passivation is relatively simple, just add a long-period smma to the original MACD index. This smooth line will reduce the oscillation intensity of the original MACD curve and make the index more moderate. Usually, MACD passivation will introduce an EMA line with a longer period (for example, 26 days) and compare it with the original moving average of price difference (EMA 12).

The function of MACD passivation is mainly to reduce the normal fluctuation of indicators, which allows us to see the market trend and the inflection point of the trend more clearly. Passivation index is more stable and reliable, which is suitable for long-term investors and trend-following traders. However, MACD passivation also has shortcomings, which may make the index lag, thus leading to the delay of trading decision. Therefore, be careful when using MACD passivation.