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McClellan Histogram Forex Technical Analysis and McClellan Histogram Forex Trading Signals

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

 

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

 

McClellan Histogram Technical Indicator

McClellan Histogram

 

Forex Technical Analysis and Generating Forex Trading Signals

 

The Histogram is momentum indicator. Signals are generated using the center line crossover method.

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

 

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

 

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

 

Technical Analysis of McClellan Histogram Technical Indicator

Technical Analysis

 

Divergence Trading - divergence trading between this indicator and the price chart can prove to be very effective Forex trading strategy in identifying potential Forex trend reversal signals and 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 and 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 and lower highs in price chart

 

To Learn more about divergence navigate to the divergence trading topic on this website

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