When should a trader buy according to the MACD trading signals?

A trader should consider buying when the MACD line crosses above the signal line because this crossover is a strong bullish signal. The MACD, or Moving Average Convergence Divergence, is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. When the MACD line, which is typically the difference between the 12-period and 26-period exponential moving averages (EMAs), crosses above the signal line, which is generally a 9-period EMA of the MACD itself, it indicates that the momentum is shifting in favor of buyers.

This upward crossover suggests that the recent price momentum is gaining strength and may lead to a potential upward movement in the stock price. Traders look for this signal as it often precedes sustained price increases, allowing them to enter positions early in a trend. Hence, such a signal can be critical for timing entry points in trading strategies.