Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

MACD histogram quantifies the separation (or deviation) and convergence between

MACD and its moving average nine (signal line).  In other words, it highlights the difference

between MACD and the signal line.  It was developed by Thomas Aspray in 1986. 

Its purpose is to warn MACD traders of a possible impending MACD's crossover with the

signal line. In effect, a crossover is expected when the difference between MACD and its

moving average nine is decreasing speedily. On the other hand, a crossover is not a matter

of urgency when an apparent deviation is in place.

Note that when there is a significant difference between MACD and the signal line, it also

signifies that the current momentum (bullish or bearish) is intact. However, that is only the

theory. As always, one should not apply the theory to the letter.

There is another way traders can utilize the MACD histogram. When there is a bullish divergence

between the histogram and MACD, traders will anticipate an imminent bullish crossover. On the

other hand, they will expect a high probability bearish crossover if a bearish divergence is in place.

Author = "George Beaulieu founder of stochastic-macd.com"

View the chart.

Image = "NIKE Inc stock on the four-hour chart that is exhibiting

a bearish MACD Histogram divergence prior to MACD indicator

crossing below its signal line."

Generally, day and swing traders look for divergence trading setups by comparing either the

histogram to MACD indicator or the price-action.  Moreover, to avoid misusing the

MACD histogram, one should always remember that the MACD histogram is a technical indicator

of another indicator (MACD).

Hence, one shall always confirm its signals with direct trading signals (price action). Indeed, it is

 a trading error to buy or sell willy-nilly because of the MACD histogram trading signals.

MACD Histogram And Zero line

Like MACD indicator, the histogram is also centered around the zero line. If MACD is above its

moving average period nine, the histogram dwells in the bullish zone above the equilibrium line.

However, it resides below the equilibrium line when MACD crosses below the signal.

MACD crosses above its signal line, it indicates that MACD is sloping up or has a positive slope.

Consequently, it is compulsory actually to check if MACD is sloping up because sometimes that

is not the case.

The opposite is also true when MACD crosses below the signal line.

In all cases, if one is trading MACD crossovers or its histogram, one must rely on its actual slope.

View the chart.

Image = "JP Morgan stock on the daily chart is showing the MACD Histogram

that is oscillating around its own zero like like the MACD indicator"

This video tutorial teaches day and swing traders how one can trade the MACD Histogram like

a professional trader.  In effect the first thing one ought to grasp is that the MACD Histogram

is primarily a technical indicator for MACD itself.  It helps traders to foretell when the standard

MACD (12, 26, 9) is about to cross above or below the its signal line. 
This tutorial is not about MACD Histogram theory, but aims to show
traders practical MACD Histogram trading tips and tricks that they can apply in the financial

markets in view to avoid trading mistakes and maximize profit. 

We highly recommend to traders to watch the full length of this unique MACD Histogram video.

Talking Points:

MACD Histogram divergences and their effective use.
Primary role of MACD Histogram.
Identifying the surge in momentum with MACD Histogram.
Pinpointing reversal trading set-ups with MACD Histogram.
Significant high and low of MACD Histogram.
Combining key support and resistance levels with MACD Histogram.
How to avoid MACD Histogram trading mistakes?
And more tips and tricks for trading the MACD Histogram like a pro.

Watch, rate and share this video tutorial today.