Histogram

AAA

DEFINITION of 'Histogram'

1. A graphical representation, similar to a bar chart in structure, that organizes a group of data points into user-specified ranges. The histogram condenses a data series into an easily interpreted visual by taking many data points and grouping them into logical ranges or bins.

Histogram



2. The MACD histogram is a very common technical indicator that illustrates the difference between the MACD line and the trigger line. This difference is then plotted on a chart in the form of a histogram to make it easy for a trader to determine a specific asset's momentum.

INVESTOPEDIA EXPLAINS 'Histogram'

1. Histograms are commonly used in statistics to demonstrate how many of a certain type of variable occurs within a specific range. For example, a census focused on the demography of a country may use a histogram of how many people there are between the ages of 0 and 10, 11 and 20, 21 and 30, 31 and 40, 41 and 50 etc. This histogram would look similar to the graph above.

2. MACD histograms are a popular tool used in technical analysis to gauge the strength of an asset's momentum. An increasing MACD histogram signals an increase in upward momentum while a decreasing histogram is used to signal downward momentum.

RELATED TERMS
  1. Momentum

    The rate of acceleration of a security's price or volume. The ...
  2. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  3. Bureau of Census

    A division of the federal government of the United States Bureau ...
  4. Moving Average Convergence Divergence ...

    A trend-following momentum indicator that shows the relationship ...
  5. Uptrend

    Describes the price movement of a financial asset when the overall ...
  6. Indicator

    Indicators are statistics used to measure current conditions ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Forex Education

    Trading The MACD Divergence

    Currency traders can use this method to avoid stop-order triggers before the real reversal.
  2. Forex Education

    Forex: Keep An Eye On Momentum

    Using the simple MACD histogram could change how forex traders analyze currency pairs for good.
  3. Active Trading

    Candle Sheds More Light Than The MACD

    Read the case against this well-established indicator.
  4. Active Trading Fundamentals

    Gauging Support And Resistance With Price By Volume

    This straightforward histogram can help you analyze the buying and selling interest in a stock.
  5. Fundamental Analysis

    Is Apple's Stock Over Valued Or Undervalued?

    Despite several drawbacks, the CAPM gives an overview of the level of return that investors should expect for bearing only systematic risk. Applying Apple, we get annual expected return of about ...
  6. Trading Strategies

    Trading On The Psychology Of Round Numbers

    Price action around big round numbers, like 10, 100 and 12000 set up special trading opportunities that take advantage of shifting crowd psychology.
  7. Options & Futures

    The Most Important Technical Indicators For Binary Options

    Trading binary options is not for the novice, but if you're ready to delve in, get to know the best technical indicators.
  8. Chart Advisor

    Commodity Traders Are Using Momentum To Profit From These Stocks

    Active traders are drawn to momentum strategies. These momentum winners of 2015 are worth a trader's second look.
  9. Trading Strategies

    How To Make The Most of Fibonacci Grids

    Build your Fibonacci skills by finding the longest price swing on your chart of interest and placing a grid over the trend. Repeat at shorter intervals.
  10. Trading Strategies

    Day Trading: Top Scenarios To Take Profits

    Three ways to take profits while day trading, based on price movement and what the asset is doing that day.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center