MACD histogram

The MACD histogram is the difference between the MACD line and its signal line:

• When the MACD line exceeds the signal line, the histogram is depicted with a positive value, exceeding zero;

• When the MACD line is less than the signal line, the histogram passes through zero.

The MACD technical indicator belongs to the class of technical analysis indicators, that is, it is an oscillator and is used to calculate the trend. The MACD histogram is constructed using exponential moving averages (EMA): fast (up to 12) and slow (up to 29). It is depicted on a graph in the form of columns.

If the MACD is above zero and the scale values ​​are increasing, then the market represents increasing changes.

If each price peak is less than the previous one, then the MACD is below zero. This concept was proposed by A. Elder. If the current maximums of the scales on the histogram close below or above the previous one, it means that the current development is ending, and the market requires either changes or unfolds its activities.

The formation of depressions in the histogram indicates a continuation of the previous signal. The MACD intersection of the zero line is comparable to the intersection of moving averages. If the intersection occurs from top to bottom, then this is a signal to sell. If the intersection occurs from bottom to top, then you need to make a purchase.  

Even a beginner in Forex will understand at first glance how to correctly use this tool when searching for successful entry points, especially since the MACD indicator is included in the set of almost every trader’s terminal .