Traditional MACD with 2 Lines and Histogram
When using the traditional MACD with two lines (the MACD line and the signal line) and a histogram, traders should look for crossovers as key signals: a bullish signal occurs when the MACD line crosses above the signal line, especially if the histogram shifts from negative to positive, indicating increasing upward momentum; conversely, a bearish signal is when the MACD line crosses below the signal line, with the histogram moving from positive to negative, suggesting downward momentum. It's important to confirm these signals with volume, trend analysis, and other indicators to reduce false signals, and to watch for divergence between MACD and price action, which can signal potential reversals. Using the histogram's height and its changes can also help gauge the strength of the trend, with larger bars indicating stronger momentum.