Signal lines are used in technical indicators, especially oscillators, to generate buy and sell signals or suggest a change in a trend.LinkedInwithBackgroundTechnicalAnalysisGuidetoTechnicalAnalysisTechnicalAnalysisBasicEducationAdvancedTechnicalAnalysisConceptsTechnicalAnalysisTechnicalAnalysisBasicEducationWhatisaSignalLineSignallinesareusedintechnicalindicators,especiallyoscillators,togeneratebuyandsellsignalsorsuggestachangeinatrend.Theyarecalledsignallinesbecausewhenanotherindicatororlinecrossesthemitisasignaltotradeorthatsomethingpotentiallyimportantishappeningwiththepriceofanasset.Itcouldbethatthepricewastrending,pulledback,andisnowstartingtotrendoragain,oritcouldsignalthatanewuptrendordowntrendisstarting.Signallinesareoftenmovingaveragesofatechnicalindicator,suchasthemovingaverageconvergence-divergence(MACD)orstochasticoscillator.Thesignallineisappliedtotheindicatortogeneratemoretradesignalsthanwouldbeavailablewithoutthesignalline.Asignallineisalsocommonlyknownasa"triggerline."ImagebySabrinaJiang©Investopedia 2021KeyTakeawaysAsignallineisnotatechnicalindicatorinandofitself.Itisusuallyamovingaverageofanindicatorthatisappliedtotheindicatorsothatthesignallineandindicatorcancrosstogeneratetradesignals.Signallinesmaybeusedindifferentwaysfordifferentindicators,buttypicallywhentheindicatorcrossesabovethesignallineitisinterpretedasbullishforthepriceandwhentheindicatorcrossesbelowthesignallineitisbearishforprice.TheFormulaForaSignalLineisThesignallineisnotanindicator,therefore,itwillbecalculateddifferentlyforeachindicatoritisusedin.Thisisbecausethecreatorofanindicatorwilloftencreateaformulaforthesignallinewhenmakingtheindicator.Thesignallineispartoftheindicator.Signalslinesareusuallysimplecalculations.Fortheexample,thesignallinefortheMACDisanine-periodexponentialmovingaverage(EMA)oftheMACDvalue.Thesignallineforthestochasticoscillatorisathree-periodsimplemovingaverage(SMA)ofthestochastic(called%Kinthiscase).HowtoCalculateaSignalLineFindtheformulaforthesignallineofthei