MACD Signals 2026: Why They Lag and How Investors Use Them
Updated September 2026
One of the most common frustrations with technical indicators is also one of the simplest to explain: they lag. You see a stock move sharply. Then, sometime afterwards, the indicator confirms what has already happened.
That was the issue raised by Michael during our 18 September webinar.
Looking at Microsoft (MSFT), he noticed that the MACD signal appeared attractive, but only after the stock had already risen significantly.
His question was straightforward: “MACD signals look good for MSFT now, but it's two months after the stock rose over $100. Can the MACD signals be slow sometimes to see when a stock spikes?” The short answer is yes.
But there is a more important lesson here. The problem isn't that MACD is doing something wrong. The problem comes when investors expect a lagging indicator to do something it was never designed to do: predict the exact top or bottom of a market.
As Alpesh put it: “Michael, yes, the MACD is a lagging indicator. If you are trying to reframe it to how do I pick the top and bottom, you can't, and you'll burn your hands.”
A lagging indicator isn't a broken indicator
Investors sometimes assume that if an indicator confirms a move after it has happened, they must be using the wrong settings, the wrong chart or perhaps even the wrong indicator. But lag is inherent to many indicators.
They are based, at least in part, on information that has already happened. That means confirmation necessarily comes after the underlying price movement.
Alpesh illustrated the point by referring to Winton Capital, a quantitative investment firm based in Hammersmith, West London: “Winton Capital, it's a multi-billion dollar hedge fund in Hammersmith in West London. And they show that all their indicators are lagging. Multi-billion dollar hedge fund.”
That is an important distinction for individual investors. The objective shouldn't be to find an indicator that somehow knows what the market is going to do next. If that is the expectation, investors are effectively looking for a crystal ball.
And Alpesh's view on that is characteristically direct: “The problem with retail clients is they think they should be able to get a crystal ball to get something ahead of time. Now, you've got two options. You're either lagging or you've got a crystal ball. I'll tell you right now, I have no crystal balls.”
Investing is about Probabilities, not Perfect Predictions
This gets to a much bigger point about investing. Markets don't provide certainty. Investors work with probabilities.
As Alpesh says: “Markets are probabilities.” That changes the way you should think about technical indicators. The goal isn't necessarily to buy at the precise bottom and sell at the precise top. In practice, trying to do that can lead investors into exactly the kind of short-term decision-making that creates unnecessary mistakes.
Instead, indicators can form part of a wider investment process. They can help provide confirmation. They can help investors impose discipline. They can help reduce the temptation to make decisions based purely on emotion or a recent price movement.
But they should not be expected to predict the future.
Your time horizon matters more than a two-month signal
There is another question that investors should ask before worrying about whether an indicator is early or late: When will you actually need the money?
If you are investing for the long term, a signal arriving after a significant price movement may be less important than it appears when looking at a chart in isolation. If, however, you need the money in the very near term, relying on a technical indicator to determine what the market will do next is a very different proposition.
Alpesh makes the point clearly: “The only time you need to know what the return is in the next year is if you need the money in the next year. And if you need the money in the next year, you should be holding cash.”
The underlying lesson is about matching your investment approach to your circumstances. A technical indicator cannot compensate for having the wrong time horizon.
So Where Does the Real Investment Work Happen?
This is where the discussion moves beyond MACD. A chart can tell you what a share price has done. An indicator can help you interpret price behaviour. But neither necessarily tells you whether the underlying business is worth owning.
That is why Alpesh's investment process starts with the companies themselves.
As he explained during the webinar: “We let the data do the heavy lifting.”
The process involves screening a universe of around ten thousand stocks and narrowing it down to a much smaller group that can meet multiple criteria, including value, growth and income.
That matters because investors can become too focused on putting companies into single categories. Alpesh's criticism of that approach is blunt: “The problem is some fund managers are value only, some are growth only. Well, that's stupid.”
The objective is not to find a perfect label for a company. It is to identify businesses that meet a range of investment criteria and then assess the evidence.
Risk Matters Because Investors Are Human
There is another part of the process that is easy to underestimate. Investors don't simply need an investment strategy that looks good on paper. They need one they can actually stick with when markets become uncomfortable.
That means understanding historical risk, volatility and drawdowns. Because even a sound investment can fall in value. The challenge is what investors do next.
Do they stay with their strategy, or do they panic and sell? Do they become bored and abandon a process because another stock has suddenly become fashionable?
Alpesh summarises the purpose of looking at these factors simply: “The point is to stop panic and boredom.”
That is a useful way to think about the role of indicators too. A technical signal doesn't have to predict the next market move to be useful. It can instead become one part of a structured process that helps an investor make decisions consistently.
Don't ask MACD to do a Job it wasn't Designed to do
Michael's question about Microsoft highlights a common trap. If you expect MACD to identify the precise moment a stock is about to surge, you are likely to be disappointed. By construction, a lagging indicator will often confirm a move after it has begun.
But that doesn't make the indicator useless. It means you need to understand what information it can provide and what information it cannot. The same principle applies across investing.
A valuation metric isn't a crystal ball. A growth rate isn't a crystal ball. A dividend yield isn't a crystal ball. Momentum isn't a crystal ball. And MACD isn't a crystal ball.
Investing is about putting different pieces of evidence together and making decisions based on probabilities rather than pretending certainty exists.
The lesson isn't to find a faster signal
The temptation after discovering that an indicator lags is to go searching for another indicator.
Something faster.
Something earlier.
Something that promises to identify the move before everyone else sees it.
That can become an endless search.
A better question is: How does this signal fit into the wider investment process?
Use data to identify businesses. Assess value, growth and income. Understand risk and drawdowns. Consider your time horizon. Then use technical information where it adds value to the process rather than expecting it to replace the process. That is a very different approach from trying to trade every market movement.
Learn the process, not just the signal
Michael asked a technical question about MACD. But underneath it was a much bigger investment question: How do you make better decisions when you cannot predict exactly what happens next?
There is no perfect indicator that solves that problem. The answer is to build a repeatable process around evidence, probabilities, risk and discipline.
That is ultimately what Campaign for a Million is about: helping investors understand the process behind investing rather than simply following the latest market signal or stock tip.
If you'd like to understand how Alpesh approaches that process and whether it could fit the way you invest, you can have a conversation with the team.
No pitch. No pressure.
Education only, not personal financial advice. Investments can go down as well as up and you may get back less than you invest. Past performance is not a guide to future performance. Alpesh Patel OBE www.campaignforamillion.com
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