Forex technical analysis indicators-MACD histogram analysis method.
In computer MT4 analysis software, DIF value minus DEA (ie, MACD, DEM) value is usually used to draw a histogram, which is represented by red bar and green bar, red bar represents positive value, and green bar represents negative value. Using red and green columns to analyze the market is intuitive, practical, and reliable.
- When the red column continues to enlarge, it indicates that the market is in a bull market and the price will continue to rise. At this time, the holding position should be held up or bought in the short-term, and it is not considered to sell until the red column cannot be enlarged.
- When the green bar continues to enlarge, it indicates that the market is in a bear market, and the price will continue to fall. At this time, you should wait and see or sell the currency. You can only consider a small amount of positions when the green bar begins to shrink.
- When the red column starts to shrink, it indicates that the bull market is about to end (or to enter the adjustment period), the price will fall sharply, and then sell short.
- When the green bar starts to shrink, it indicates that the market’s plunge is about to end, and the price will stop falling (or enter a consolidation). At this time, a long-term strategic position can be opened in small amounts instead of easily selling short.
- When the red bar starts to disappear and the green bar starts to be released, this is one of the market transfer signals, indicating that the later rising market (or high consolidation market) is about to end, and the exchange rate will start to decline faster.
- When the green bar begins to disappear and the red bar begins to be released, this is also one of the market reversal signals, indicating that the decline (or low consolidation) of the foreign exchange market has ended, and the exchange rate will begin to accelerate. Positions are up.