McClellan Histogram Analysis and McClellan Histogram Signals
The McClellan Histogram is a graphical representation of the McClellan Oscillator and its signal line. This difference between the 2 is drawn as a histogram.
This is an oscillator technical indicator, the center line is the zero cross over mark which is used to generate buy & sell signals.
McClellan Histogram
Technical Analysis and Generating Signals
Histogram is momentum trading indicator. Signals are derived/generated using the centerline crossover trading method.
- Bullish trading signal - Above Zero
- Bearish Signal - Below Zero
There are two fundamental techniques for using this indicator to generate trade signals.
Zero-Level Cross-over - When the histogram crosses above zero a buy signal is generated. Otherwise, when the histogram oscillator indicator crosses below zero mark a sell trading signal is generated.
Technical Analysis in FX Trading
Divergence Trading - divergence between this trading indicator and the market chart can prove to be an effective Forex strategy in spotting potential price trend reversal setups & trend continuation trade signals.
There are several types of Divergence Signals:
Trend Reversal Signals - Classic Divergence Trading Setup Signals
- Classic Bullish Divergence Setup Signals - Lower lows on price chart and higher lows on the McClellan Histogram
- Classic Bearish Divergence Setup Signals - Higher highs on price chart & lower highs on McClellan Histogram
Trend Continuation Signals - Hidden Divergence Trade Setup Signal
- Hidden Bullish Divergence Trade Setup Signals- Lower lows in McClellan Histogram and higher lows on the price chart
- Hidden Bearish Divergence Trade Setup Signals- Higher highs in McClellan Histogram and lower highs on the price chart
To Learn more about divergence navigate to the divergence lesson on this site
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