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MACD histogram

Bars showing the gap between the MACD line and its signal line, used to see momentum changing before the lines actually cross.

MACD line, signal line and histogram under a price chartA price line above a lower panel holding two curves and a bar histogram measured from a zero line, with the point where the faster curve rises through the slower one circled.PRICEMACD (12, 26, 9)0signalMACDbullishcrossover
MACD, signal line and histogram. The MACD line is the gap between a fast and a slow moving average, and the signal line is a smoothed copy of it. The bars show the distance between the two, and the circle marks where the faster line rises through the slower one.

The histogram is positive when MACD is above its signal line and negative below. Because it measures the gap, it shrinks before a crossover happens, which is why traders watch it for early warning.

Its most cited use is divergence: price making a higher high while the histogram makes a lower high suggests the second push had less momentum behind it. That observation is real, but divergences can persist through several further highs before anything happens.

It is still derived entirely from lagging averages, so the early warning is relative, not absolute. Treat a shrinking histogram as a reason to manage an existing position rather than to reverse into a new one.

Related: macd, macd-signal-line, divergence, hidden-divergence, momentum-indicator

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