Trade Forex Trading

McClellan Histogram Analysis & McClellan Histogram Signals

The McClellan Histogram is a graphical representation of the McClellan Oscillator & its signal line. This difference between the two is plotted as a histogram.

This is an oscillator, the center line is the zero cross over mark which is used to generate buy and sell signals.

McClellan Histogram Analysis - McClellan Histogram Technical Indicator

McClellan Histogram

Technical Analysis and Generating Signals

The Histogram is momentum indicator. Signals are generated using the center-line cross over method.

  • Bullish signal- Above Zero
  • Bearish Signal - Below Zero

There are two fundamental techniques for using this trading indicator to generate signals.

Zero-Level Cross-over - When the histogram crosses above the zero a buy signal is generated. Otherwise, when the histogram oscillator crosses below zero a sell signal is generated.

McClellan Histogram Analysis - Indicator for McClellan Histogram Indicator

Technical Analysis in FX Trading

Divergence Trading - divergence between this trading indicator and the price chart can prove to be very effective Forex strategy in spotting potential trend reversal signals & trend continuation signals.

There are several types of Divergence Signals:

Trend Reversal Signals - Classic Divergence Signals

  • Classic Bullish Divergence Signals - Lower lows on price chart and higher lows in the McClellan Histogram

  • Classic Bearish Divergence Signals - Higher highs on price chart & lower highs in the McClellan Histogram

Trend Continuation Signals - Hidden Divergence Signal

  • Hidden Bullish Divergence Signals- Lower lows in McClellan Histogram and higher lows in price chart

  • Hidden Bearish Divergence Signals- Higher highs in McClellan Histogram & lower highs in price chart

To Learn more about divergence navigate to the divergence lesson on this website