MACD Histogram

MACD minus its signal line, on its own, as columns.

What it measures

The same histogram as the third value of MACD with a signal line. It is above zero while MACD is above its signal line.

How traders read it

Traders watch it cross zero, which is MACD crossing its signal, and its columns shrinking, which shows momentum fading before the cross.

Formula

histogram = MACD(fast, slow) − EMA(MACD, signalEMAPeriods)

Settings and output

Call: macdHistogram(fastEMAPeriods, slowEMAPeriods, signalEMAPeriods)

Setting	Chart default
`fastEMAPeriods`: Fast EMA Periods	12
`slowEMAPeriods`: Slow EMA Periods	26
`signalEMAPeriods`: Signal EMA Periods	9

What you get: a number.

Warm-up: with macdHistogram(12, 26, 9), it asks for 26 bars of history and a run-up of 61, and its first value came on bar 35 of the example data.

Chart

MACD Histogram drawn by its own code on example prices

The prices are made up, hourly, and the same on every page, so the chart shows how the indicator behaves, not how a market behaved.

In an algorithm

let previous;

function onIntervalClose() {
  const value = macdHistogram(12, 26, 9);
  if (OPEN_POSITIONS_COUNT === 0 && previous !== undefined && previous < 0 && value > 0) {
    openPosition("BUY", { quantity: 10000, stopLossPips: 25, takeProfitPips: 50 });
  }
  previous = value;
}