Technical analysis of foreign exchange: MACD histogram

For many foreign exchange investors, it is very important to learn how to analyze some graphs in foreign exchange. Today, I will take you to understand the MACD histogram in foreign exchange technical analysis.


MACD histogram is applicable to any time structure, weekly, daily and intraday trend chart. The significance of weekly chart signals will be greater than that of daily charts and intraday trend charts. This principle applies to any technical indicator - the longer the architecture signal, the more important it represents.

The MACD histogram shows the rise and fall of multi / air forces. The slope of the MACD histogram keeps the same direction as the price trend, and the trend is safe. If the direction of the slope is different from that of the price trend, the trend is in doubt and should be traded in the direction of the slope of the MACD histogram.

(1) When the MACD histogram stops falling and rises, it is a buy signal, establishing a long position, and stop loss is set at the lower side of the nearest secondary low point.
(2) When the MACD histogram stops rising and falling, it is a sell signal, establishing a short position, and stop loss is set at the upper side of the nearest secondary high point.
(3) The strongest signal in technical analysis: if MACD histogram deviates from price, it represents a major turning point. Such signals rarely occur, but once they occur, they often develop into major reversals and the beginning of new trends.

When prices hit new highs and the head of the MACD histogram falls, it's a sell signal. Establish short position and stop loss on the upper side of the highest point. When prices hit new lows and MACD histogram bottoms up. This represents a buy signal, the establishment of a long position, the stop loss point is set at the bottom side of the lowest point. (if the long deviation between MACD histogram and price is invalid, you will be stopped losing and continue to observe. If the price hits a new low and MACD histogram shows a third higher bottom, it is a "triple bull deviation" - a very strong buying signal. In this case, when the MACD histogram starts to pick up, buy immediately. For "triple short deviation", the reverse venting procedure is adopted. )

On the daily chart, the MACD histogram fluctuates frequently. In practice, each change cannot be regarded as a trading signal. Relatively speaking, the slope change of MACD histogram of weekly chart is more meaningful.

If the MACD column daily chart reaches a three-month high, it means that bulls are like a rainbow, and the price may rise further; on the contrary, if the MACD column daily chart reaches a new low of three months, it means that the price may fall further.

In the rally, MACD histogram is at a record high, which means that the upward trend is very healthy. The next rally may retest or surpass the peak of the previous wave. Similarly, in the decline, the MACD histogram records a new low, which means that bears are full of momentum and may retest or surpass the previous low.

MACD histogram is applicable to any time structure, weekly, daily and intraday trend chart. The significance of weekly chart signals will be greater than that of daily charts and intraday trend charts. This principle applies to any technical indicator - the longer the architecture signal, the more important it represents.

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