MACD Histogram

Creator: Gerald Appel

Short period: 12

Long Period: 26

Average Period: 9

The MACD Histogram shows two lines below the chart and the histogram bars

1 – Green line represents MACD % line

2 – The red line represents the signal line to the MACD% line

An MACD indicator calculates the difference between two moving averages. When the MACD indicator is rising, it indicates that the distance between two moving averages is increasing. A falling MACD indicator indicates that the distance between two moving averages is decreasing.

A MACD line above zero indicates a bullish trend. A MACD line below zero indicates a bearish trend.

An average line of the MACD line is known as a signal line. The MACD line above the signal line indicates a bullish trend. A MACD line below the signal line indicates a bearish trend.

Therefore, MACD lines above signal lines and zero lines are very bullish, while MACD lines below signal lines and zero lines are very bearish.

The histogram bars plotted along with the indicator show the difference between the MACD line and the signal line. The tall bars indicate that the distance between the MACD and signal lines is high and above the zero line. Long bearish bars indicate that the difference between the MACD line and the signal line is high and below the zero line.

Click here to learn more about MACD line.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.