MACD Histogram Reversal

MACD Histogram Reversal is a momentum strategy that trades the MACD histogram crossing zero. The histogram is the gap between the MACD line and its signal line; it crosses zero at the exact moment the MACD line crosses its signal line. Buying when the histogram turns positive catches that momentum turn one step earlier than waiting for a confirmed MACD/signal crossover to be established - which is the strategy's whole appeal, and its main risk (more, earlier signals means more whipsaws in choppy markets).

It is an easy, momentum/trending strategy for 1H–Daily timeframes.

How it trades

Buy (histogram turns positive):

CROSSOVER(MACDHIST(12,26,9), 0)

Sell (histogram turns negative):

CROSSUNDER(MACDHIST(12,26,9), 0)

CROSSOVER/CROSSUNDER are events, evaluated against the previous candle: the histogram must have been at-or-below zero last bar and strictly above it this bar to fire a buy (and the mirror for a sell). So the strategy trades the sign flip, not merely "histogram is positive".

When it works best

Best on names with clean, decisive momentum swings, where the histogram crosses zero once per real turn and follows through. It is earlier than a MACD crossover, but that earliness cuts both ways: in sideways, choppy markets the histogram oscillates around zero and generates frequent whipsaw signals with no trend to ride.