What does the MACD Histogram Measure?


MACD consists of three components. First, there is MACD itself, which is the 12-day EMA less the 26-day EMA. Second, there is the signal line, which is a 9-day EMA of MACD. Third, there is the MACD Histogram, which plots the difference between MACD and its 9-day EMA. As an an indicator of an indicator, the MACD Histogram measures the momentum of MACD.

The MACD Histogram can be used to anticipates signal line crossovers MACD because the histogram narrows as the gap between MACD and its 9-day EMA narrows. Also notice that the histogram turns up or down ahead of MACD. Overall, the histogram is negative when MACD is below its signal line and positive when MACD is above its signal line.

Click this image for a live chart.

The basic MACD indicator in SharpCharts plots MACD, its signal line and its histogram. Sharpcharts also has a stand-alone indicator for the MACD Histogram.  You can read more about MACD in the Chart School.

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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