MACD (Moving Average Convergence Divergence) is probably the most famous trend following indicator, developed by Gerald Appel. The indicator is primarily the difference between the two Moving Averages, coupled with a further smoothing up of the result. Appel himself considered the most effective parameters to be 12, 26 and 9.
Hence the formula looks like this:
MACD Line = (12 day EMA – 26 day EMA) and the Signal Line = 9 day EMA of MACD Line
Many traders prefer using the Histogram form of the indicator which is plotted on the chart as the difference between the MACD line and the Signal line.