Question On MACD Histogram

[myminitrading]

How come the histogram ticks down when the price is rising?

 

[jficquette]

Its a rate of change indicator. Difference between moving averages. Difference can get smaller and histogram will step against price.

John

 

[Allaces]

Think of it as waning momentum and all will become clear

 

[myminitrading]

I was thinking that with the futures ramping up overnight and the Index zooming up at the open, and just trading in a range might cause this.

 

[El OchoCinco]

Basically the short term average jumps ahead of the longer term one when the underlying makes a strong move higher. As the price keeps rising the slower longer term moving average starts processing the data as well and starts moving up at a sharper incline and the gap between the shorter and longer term MAs narrows.

 

[agras01]

When the 2 averages converge, MAC starts to change direction.

Asterios

 

[IronFist]

Add the MACD to your chart and compare it with the MACD Histogram and you'll see. The histogram is just the distance between the two MACD lines.

 

[nkhoi]

Quote from myminitrading:

How come the histogram ticks down when the price is rising?

fortunately, the histogram expands again.