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How to Read the MACD Histogram

The MACD histogram is a strip of bars, one per day, each the MACD line minus its signal line: green above zero, red below, taller when the two are far apart and shorter when they are close. This paper shows you the euro's bars of June and July 2025 drawn from real values, the idea as a pair of scissors whose opening is the bar, the bars under the daily chart, the four things a strip of bars can be doing and the words for each, and the histogram's colours on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Bars that grow, shrink, and cross zero

The MACD histogram is a strip of bars, one per day. Each bar is the MACD line minus its signal line — the gap between the line and a nine-day average of itself — drawn green when the line is above its signal and red when it is below. On 20 June 2025 the euro's two were equal and the bar was nothing. The bars then grew each day to 22.3 pips on 1 July — a pip being the fourth decimal place, the smallest step most people count in. They shrank for four days, and on 8 July the first red bar appeared.

A pair of scissors

The picture is a pair of scissors. One blade is the MACD line and the other is its signal, and the bar is how far open the blades are. While they open wider the bars grow. While they close, the bars shrink. When the blades cross and open the other way, the bars change colour. Reading the histogram is watching the scissors. It does not say where the price is; it says what the two blades are doing to each other, day by day.

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