Signal Line

Many indicators plot two series: the main calculation, and a smoothed version of it drawn alongside, usually called the signal line. Because the second is derived from the first, it moves the same way with more delay, and the gap between them is a compact way of expressing whether the main series is rising or falling faster than its own recent average — some studies draw exactly that gap as a histogram. A crossing of the two lines is therefore not new information arriving; it is the moment an existing change in the main series became large enough to overcome the smoothing. Its timing is set by the smoothing length, which is a setting, so the same chart produces crossings at different moments under different settings, and the number of crossings rises as the smoothing is shortened. Which series a platform labels the signal, and how it smooths it, is defined in the indicator's own specification.