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. Moving Average Convergence Divergence ...

    A trend-following momentum indicator that shows the relationship ...
  2. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  3. Momentum

    The rate of acceleration of a security's price or volume. The ...
  4. Bureau of Census

    A division of the federal government of the United States Bureau ...
  5. Uptrend

    Describes the price movement of a financial asset when the overall ...
  6. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
Related Articles
  1. Trading The MACD Divergence
    Forex Education

    Trading The MACD Divergence

  2. Forex: Keep An Eye On Momentum
    Forex Education

    Forex: Keep An Eye On Momentum

  3. Candle Sheds More Light Than The MACD
    Active Trading

    Candle Sheds More Light Than The MACD

  4. Gauging Support And Resistance With ...
    Active Trading Fundamentals

    Gauging Support And Resistance With ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center