McClellan Histogram Commodities Analysis and McClellan Histogram Trading 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, the center line is the zero crossover mark which is used to generate buy & sell trade signals.

McClellan Histogram

Commodity Analysis and Generating Trade 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 indicator to generate trade 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.

Analysis in Commodities Trading

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

There are several types of Trade Divergence Trade Signals:

Commodities Trend Reversal Signals - Classic Divergence Signals

• Commodity Trading Classic Bullish Divergence Signals - Lower lows on commodities price chart & higher lows in the McClellan Histogram

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

Commodities Trend Continuation Signals - Hidden Divergence Signal

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

• Trade Hidden Bearish Divergence Signals- Higher highs in McClellan Histogram and lower highs in commodities trading price chart

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