CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

MACD histogram

An MACD-histogram indicates the distance between MACD and its signal line (the 9-period EMA in the MACD). Being an oscillator the MACD-histogram fluctuates around the zero line.

Traders use the MACD-histogram to be alerted of imminent signal line crossovers in the MACD. The MACD is based on moving averages and moving averages lag price. The MACD-histogram does not have this slight lag. Hence a cross of the zero line by the MACD-histogram precedes an imminent MACD signal.

This example shows both the MACD (classic settings 26, 12,9) and the MACD-Histogram. The vertical dotted lines are to indicate that the cross on the MACD-histogram happens slightly earlier than the MACD crossover.