Multi-time Frame Trend DirectionThis is a multi-time frame trend direction indicator. It indicates whether the trend is ascending or descending across multiple time frames: 5M, 15M, 30M, 1H, 4H, and Daily.
The logic is based on the positions of EMA12 and EMA26.
These EMAs are smoothed with an SMA.
Why 12 and 26, and why are they smoothed with 9?
As you might surmise, these parameters are derived from the MACD.
I recommend not altering the parameters, but the choice is yours. Enjoy.
Macd-v
Triple EMA Distance IndicatorTriple EMA Distance Indicator
The Triple EMA Distance indicator comprises two sets of triple exponential moving averages (EMAs). One set uses the same smoothing length for all EMAs, while the other set doubles the length for the last EMA. This indicator provides visual cues based on the relationship between these EMAs and candlestick patterns.
Blue Condition:
Indicates when the fast EMA is above the slow EMA.
The distance between the two EMAs is increasing.
Candlesticks and EMAs are colored light blue.
Orange Condition:
Activates when the fast EMA is below the slow EMA.
The distance between the two EMAs is increasing.
Candlesticks and EMAs are colored orange.
Beige Condition:
Occurs when the fast EMA is below the slow EMA.
The distance between the two EMAs is decreasing.
Candlesticks and EMAs are colored beige.
Light Blue Condition:
Represents when the fast EMA is above the slow EMA.
The distance between the two EMAs is decreasing.
Candlesticks and EMAs are colored light blue.
Divergence Detector [TradingFinder] RSI + MACD + AO Oscillator 🔵 Introduction
🟣 Understanding Divergence
As mentioned, divergence occurs in technical analysis when a stock's price behaves contrary to indicators on the price chart. Divergence can signify either a reversal of the stock's trend or a continuation of the previous trend correction.
Divergences can act as reversal patterns or continuation patterns. Moreover, divergences can be utilized to identify potential support and resistance levels.
For instance, when an indicator is trending upwards and positive, but the price is declining and trending downwards, divergence occurs. Divergence in a stock indicates trader indecision in buying and selling and warns traders to reconsider their decisions regarding buying or holding the stock.
Divergence aids analysts in identifying critical price points. In indicator divergences, it serves as a potent signal in the realm of technical analysis.
🟣 Types of Divergence
1.Regular Divergence
o Positive Regular Divergence (RD+)
o Negative Regular Divergence (RD-)
2.Hidden Divergence
o Positive Hidden Divergence (HD+)
o Negative Hidden Divergence (HD-)
3.Time Divergence
Key Note : This indicator is specifically designed to identify "Regular Divergence" only. Therefore, the following explanation pertains to this type of divergence.
🔵 Regular Divergence/Convergence
Regular Divergence(Convergence) occurs due to conflicting behavior between the indicator and the price chart, typically at the end of a trend. Recognizing Regular Divergence suggests an anticipation of a trend reversal or a pattern resembling a reversal.
🟣 Positive Regular Divergence (RD+)
In contrast to negative divergence, positive Regular Divergence occurs at the end of a downtrend and between two price lows. It manifests when the price forms a new low on the price chart, but the indicator fails to recognize it.
Positive Regular Divergence indicates strong buying pressure and weak selling pressure. Following the identification of positive divergence on the chart, one can anticipate a price increase for the examined stock.
🟣 Negative Regular Divergence (RD-)
This type of Regular Divergence emerges between two price highs during an uptrend. A new high is formed on the price chart, but the indicator fails to acknowledge it. This scenario indicates negative Regular Divergence.
The likelihood of a subsequent market downturn is high. Negative divergence signifies strong selling pressure and weak buying pressure, suggesting an unfavorable future for the stock.
🔵 How to use
By utilizing the "Fractal Period" input, you can specify your desired periods for identifying divergences.
Additionally, through the "Divergence Detect Method" feature, you can choose which oscillators (MACD, RSI, or AO) to base divergence identification on.
Divergence in MACD Oscillator :
Divergence in the MACD indicator occurs when the price chart and the MACD line form a noticeable opposing pattern, meaning the price moves contrary to the MACD line. In this scenario, one expects a reversal in price direction.
Divergence in RSI Oscillator :
If divergence occurs during a downtrend on the price chart (two consecutive lows, with the second low being lower) and on the corresponding RSI point (two consecutive lows, with the second low being higher), it signifies positive Regular Divergence and implies a buying signal.
Conversely, if divergence occurs during an uptrend on the price chart (two consecutive highs, with the second high being higher) and on the corresponding RSI point (two consecutive highs, with the second high being lower), it indicates negative Regular Divergence, signaling a selling opportunity.
Divergence in AO Oscillator :
The AO indicator calculates histograms similar to the AO base. It calculates the difference between the simple moving averages of 5 and 34 periods based on the median of each bar. Then, it plots the bars based on the difference.
It then compares the histograms to detect peaks and troughs in the AO histograms and compares the identified peaks and troughs to the price. Whenever divergence is detected, it plots lines and arrows.
🔵 Table
The table contains information on the functional features of this oscillator that you can utilize. Four categories of information are presented in the table: "Exist," "Consecutive," "Divergence Quality," and "Change Phase Indicator."
Exist :
If divergence exists, you'll see "+" in this row.
Consecutive :
Divergences may occur consecutively. If same-type divergences form within short intervals, you can observe the count in this row.
Divergence Quality : Based on the number of consecutive divergences, their quality can be evaluated. If one divergence exists, its quality is considered "Normal." If two divergences exist, the quality is "Good," and if three or more divergences exist, the quality is considered "Strong."
Change Phase Indicator : If a phase change occurs between two oscillation peaks formed based on divergence, this change is identified and displayed in this row.
MACD on RSIThe MACD on RSI indicator combines elements of the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI). It calculates the RSI on a specified source with a customizable length, then applies two exponential moving averages (EMAs) to the RSI values. The difference between these EMAs forms the MACD line, visually representing the momentum of the RSI.
MACD - Calculated with VWMAThe only difference from the classic MACD is that this one is calculated with VWMA instead of sma.
Why do I prefer it?
Classic MACD does not include volume.
But MACD - VWMA includes volume as well.
How to use it?
Whatever you do with MACD, you can do with this.
However, if my other indicators meet the conditions, I check MACD - VWMA and if I see that Macd is above the signal, I open the position to buy etc. even if it is below zero.
Again, if my other indicators meet the conditions, I use this method.
Enjoy it!
CAPACE MARKETThis custom indicator combines the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) into a single trading tool. It calculates the MACD and RSI values, then averages these two indicators to create a composite line. This average line is intended to capture the momentum and relative strength of the market simultaneously, potentially offering a more nuanced view of market conditions.
Key features of the indicator include:
Visualization of MACD and RSI Lines: It plots the MACD and RSI values as separate lines on the chart, allowing traders to see the behavior of each indicator clearly.
Average Line: A line representing the average of the MACD and RSI indicators is plotted, providing a synthesized view of both momentum and strength.
Entry Points Indication: The indicator uses red dots to mark the points where the average line crosses over or under the MACD or RSI lines. These intersections are meant to signal potential entry points for traders.
Market Condition Highlighting: The background color changes based on whether the average line is above or below zero. A green background suggests a positive market condition (bullish), while a red background indicates a negative market condition (bearish).
This tool aims to offer traders an integrated perspective by combining the insights of both MACD and RSI, potentially aiding in the identification of entry and exit points as well as the overall market sentiment.
MACD by Take and TradeImproved version of MACD with asymmetrical BUY and SELL approaches.
This indicator is based on popular MACD one, but with some "tricks" designed to make it more applicable to the rapidly changing crypto market.
Key benefits:
Dynamic auto-adjusted threshold to filter out weak signals
Highlighted BUY/SELL signals with divergence (if a signal is accompanied by divergence, for example, price makes a new high while macd has a second high below the first, this signal is considered stronger and will be highlighted in a darker color)
Boost BUY signals on very slow market in accumulation phase
Not symmetric! It uses 2 different signal lines, which allows to obtain SELL signals earlier comparing to classic MACD approach
Classic concept of MACD
Classic MACD, in its simplest case, consists of two lines - macd line and signal line. Macd line is a difference between so-called "fast" and "slow" EMA lines (there are just a Exponential Moving Average lines with different windows: "12" for fast and "26" for slow). Signal line is just a smoothed "macd" line.
When macd line crosses signal line from bottom to up and intersection point < 0, this is "BUY" signal. And vise versa, when macd line crosses signal line from top to bottom, and intersection point > 0, this is "SELL" signal.
Parameters used in default configuration of classic MACD indicator:
Fast line: EMA-12
Slow line: EMA-26
Signal line: EMA-9
Problem of classic concept
Classic MACD indicator usually gives not bad "BUY" signals, especially if using them not for operational trading but for "investment" strategy. But "SELL" signalls usually generated too late. Simply because the market tends to fall much faster than it rises.
Possible solution (the main feature of our version of MACD)
To make indicator react faster on SELL condition, while still keeping it reliable for BUY signals, we decided to use two signal lines . Faster than default signal line (with window=6) for BUY signals and much faster than default (with window=2) for SELL signals.
This approach allowed us to receive sell signals earlier and exit deals on more favorable prices. Trade off of this change - is the number of SELL signals - there were more of them. However, this does not matter, since we receive the very first sell signal with a "very fast signal line" much earlier than with classic indicator settings.
Parameters we use in our improved MACD indicator:
Fast line: EMA-12
Slow line: EMA-24
Faster signal line: EMA-6
Much faster signal line: EMA-2
Removing noise (false triggerings)
Other drawback of classic MACD - it generates a lot of "weak" (false) signals. This signals are generated when macd crosses signal line much close to zero-line. And usually there are a lot of such intersections.
To remove this kind of noise, we added a trigger threshold, which by default is equal to 2.5% of the average asset price over a long period of time. Due to the link to the average price, this threshold automatically takes a specific value for each trading pair. Threshold 2.5% works perfect for all trading pairs for 1D timeframe. For other timeframes user can (and maybe will want) change it.
Boost weak BUY signals in a prolonged bear market
Signals on bearish stage are usually very weak, because there is no volatility, and no price impulse. And such signals will be filtered out as "noise" - see above. But this time is perfect time to buy! Therefore, we further boost the buy signals in a prolonged bear market so that they can pass through the filter and appear on the chart. Bearish period is the best time to invest!
Developed by Take and Trade. Enjoy using it!
MACD / Connectable [Azullian]Enhance your market insight with the MACD indicator. Monitor momentum to make more informed trading decisions, facilitating the development of stronger strategies.
This connectable MACD indicator is part of an indicator system designed to help test, visualize and build strategy configurations without coding. Like all connectable indicators , it interacts through the TradingView input source, which serves as a signal connector to link indicators to each other. All connectable indicators send signal weight to the next node in the system until it reaches either a connectable signal monitor, signal filter and/or strategy.
█ UNIFORM SETTINGS AND A WAY OF WORK
Although connectable indicators may have specific weight scoring conditions, they all aim to follow a standardized general approach to weight scoring settings, as outlined below.
■ Connectable indicators - Settings
• 🗲 Energy: Energy applies an ATR multiplier to the plotted shapes on the chart. A higher value plots shapes farther away from the candle, enhancing visibility.
• ☼ Brightness: Brightness determines the opacity of the shape plotted on the chart, aiding visibility. Indicator weight also influences opacity.
• → Input: Use the input setting to specify a data source for the indicator. Here you can connect the indicator to other indicators.
• ⌥ Flow: Determine where you want to receive signals from:
○ Both: Weights from this indicator and the connected indicator will apply
○ Indicator only: Only weights from this indicator will apply
○ Input only: Only weights from the connected indicator will apply
• ⥅ Weight multiplier: Multiply all weights in the entire indicator by a given factor, useful for quickly testing different indicators in a granular setup.
• ⥇ Threshold: Set a threshold to indicate the minimum amount of weight it should receive to pass it through to the next indicator.
• ⥱ Limiter: Set a hard limit to the maximum amount of weight that can be fed through the indicator.
■ Connectable indicators - Weight scoring settings
▢ Weight scoring conditions
• SM – Signal mode: Enable specific conditions for weight scoring
○ All: All signals will be scored.
○ Entries only: Only entries will score.
○ Exits only: Only exits will score.
○ Entries & exits: Both entries and exits will score.
○ Zone: Continuous scoring for each candle within the zone.
• SP – Signal period: Defines a range of candles within which a signal can score.
• SC - Signal count: Specifies the number of bars to retrospectively examine and score.
○ Single: Score for a single occurrence
○ All occurrences: Score for all occurrences
○ Single + Threshold: Score for single occurrences within the signal period (SP)
○ Every + Threshold: Score for all occurrences within the signal period (SP)
▢ Weight scoring direction
• ES: Enter Short weight
• XL: Exit long weight
• EL: Enter Long weight
• XS: Exit Short weight
▢ Weight scoring values
• Weights can hold either positive or negative scores. Positive weights enhance a particular trading direction, while negative weights diminish it.
█ MACD - INDICATOR SETTINGS
■ Main settings
• Enable/Disable Indicator: Toggle the entire indicator on or off.
• S - Source: Choose an alternative data source for the MACD calculation.
• T - Timeframe: Select an alternative timeframe for the MACD calculation.
• FL - Fast Length: Define the number of bars or periods used in the MACD calculation for the fast length.
• SL - Fast Length: Define the number of bars or periods used in the MACD calculation for the slow length.
• SM - Smoothing: Smooths the averaged MACD over a specified period.
• C - Condition Define the smoothing amount
○ Above/Below zero: : Trigger when the MACD line is above or below zero
○ All: : Trigger on all conditions
■ MACD Scoring functionality
• The MACD scores long entries when it crosses above its smoothed value and is below the zero line.
• The MACD scores long exits when it crosses below its smoothed value after a long entry.
• The MACD scores long zones the entire time the MACD line is above its smoothed value and below zero.
• The MACD scores short entries when it crosses below its smoothed value and is above the zero line.
• The MACD scores short exits when it crosses above its smoothed value after a short entry.
• The MACD scores short zones the entire time the MACD line is below its smoothed value and above zero.
█ PLOTTING
• Standard: Symbols (EL, XS, ES, XL) appear relative to candles based on set conditions. Their opacity and position vary with weight.
• Conditional Settings: A larger icon appears if global conditions are met. For instance, with a Threshold(⥇) of 12, Signal Period (SP) of 3, and Scoring Condition (SC) set to "EVERY", an MACD signaling over two times in 3 candles (scoring 6 each) triggers a larger icon.
█ USAGE OF CONNECTABLE INDICATORS
■ Connectable chaining mechanism
Connectable indicators can be connected directly to the signal monitor, signal filter or strategy , or they can be daisy chained to each other while the last indicator in the chain connects to the signal monitor, signal filter or strategy. When using a signal filter you can chain the filter to the strategy input to make your chain complete.
• Direct chaining: Connect an indicator directly to the signal monitor, signal filter or strategy through the provided inputs (→).
• Daisy chaining: Connect indicators using the indicator input (→). The first in a daisy chain should have a flow (⌥) set to 'Indicator only'. Subsequent indicators use 'Both' to pass the previous weight. The final indicator connects to the signal monitor, signal filter, or strategy.
■ Set up this indicator with a signal filter and strategy
The indicator provides visual cues based on signal conditions. However, its weight system is best utilized when paired with a connectable signal filter, monitor, or strategy .
Let's connect the MACD to a connectable signal filter and a strategy :
1. Load all relevant indicators
• Load MACD / Connectable
• Load Signal filter / Connectable
• Load Strategy / Connectable
2. Signal Filter: Connect the MACD to the Signal Filter
• Open the signal filter settings
• Choose one of the three input dropdowns (1→, 2→, 3→) and choose : MACD / Connectable: Signal Connector
• Toggle the enable box before the connected input to enable the incoming signal
3. Signal Filter: Update the filter signals settings if needed
• The default settings of the filter enable EL (Enter Long), XL (Exit Long), ES (Enter Short) and XS (Exit Short).
4. Signal Filter: Update the weight threshold settings if needed
• All connectable indicators load by default with a score of 6 for each direction (EL, XL, ES, XS)
• By default, weight threshold (TH) is set at 5. This allows each occurrence to score, as the default score in each connectable indicator is 1 point above the threshold. Adjust to your liking.
5. Strategy: Connect the strategy to the signal filter in the strategy settings
• Select a strategy input → and select the Signal filter: Signal connector
6. Strategy: Enable filter compatible directions
• Set the signal mode of the strategy to a compatible direction with the signal filter.
Now that everything is connected, you'll notice green spikes in the signal filter representing long signals, and red spikes indicating short signals. Trades will also appear on the chart, complemented by a performance overview. Your journey is just beginning: delve into different scoring mechanisms, merge diverse connectable indicators, and craft unique chains. Instantly test your results and discover the potential of your configurations. Dive deep and enjoy the process!
█ BENEFITS
• Adaptable Modular Design: Arrange indicators in diverse structures via direct or daisy chaining, allowing tailored configurations to align with your analysis approach.
• Streamlined Backtesting: Simplify the iterative process of testing and adjusting combinations, facilitating a smoother exploration of potential setups.
• Intuitive Interface: Navigate TradingView with added ease. Integrate desired indicators, adjust settings, and establish alerts without delving into complex code.
• Signal Weight Precision: Leverage granular weight allocation among signals, offering a deeper layer of customization in strategy formulation.
• Advanced Signal Filtering: Define entry and exit conditions with more clarity, granting an added layer of strategy precision.
• Clear Visual Feedback: Distinct visual signals and cues enhance the readability of charts, promoting informed decision-making.
• Standardized Defaults: Indicators are equipped with universally recognized preset settings, ensuring consistency in initial setups across different types like momentum or volatility.
• Reliability: Our indicators are meticulously developed to prevent repainting. We strictly adhere to TradingView's coding conventions, ensuring our code is both performant and clean.
█ COMPATIBLE INDICATORS
Each indicator that incorporates our open-source 'azLibConnector' library and adheres to our conventions can be effortlessly integrated and used as detailed above.
For clarity and recognition within the TradingView platform, we append the suffix ' / Connectable' to every compatible indicator.
█ COMMON MISTAKES, CLARIFICATIONS AND TIPS
• Removing an indicator from a chain: Deleting a linked indicator and confirming the "remove study tree" alert will also remove all underlying indicators in the object tree. Before removing one, disconnect the adjacent indicators and move it to the object stack's bottom.
• Point systems: The azLibConnector provides 500 points for each direction (EL: Enter long, XL: Exit long, ES: Enter short, XS: Exit short) Remember this cap when devising a point structure.
• Flow misconfiguration: In daisy chains the first indicator should always have a flow (⌥) setting of 'indicator only' while other indicator should have a flow (⌥) setting of 'both'.
• Hide attributes: As connectable indicators send through quite some information you'll notice all the arguments are taking up some screenwidth and cause some visual clutter. You can disable arguments in Chart Settings / Status line.
• Layout and abbreviations: To maintain a consistent structure, we use abbreviations for each input. While this may initially seem complex, you'll quickly become familiar with them. Each abbreviation is also explained in the inline tooltips.
• Inputs: Connecting a connectable indicator directly to the strategy delivers the raw signal without a weight threshold, meaning every signal will trigger a trade.
█ A NOTE OF GRATITUDE
Through years of exploring TradingView and Pine Script, we've drawn immense inspiration from the community's knowledge and innovation. Thank you for being a constant source of motivation and insight.
█ RISK DISCLAIMER
Azullian's content, tools, scripts, articles, and educational offerings are presented purely for educational and informational uses. Please be aware that past performance should not be considered a predictor of future results.
MACD_TRIGGER_CROSS_TRIANGLEMACD Triangle Trigger Indicator by thebearfib
Overview
The MACD Cross Triangle Indicator is a powerful tool for traders who rely on the MACD's signal line crossovers to make informed trading decisions. This indicator enhances the traditional MACD by allowing users to customize triggers for bullish and bearish signals and by displaying these signals directly on the chart with visually distinctive labels.
Features
Customizable Color Scheme: Choose distinct colors for bullish and bearish signals to fit your chart's theme or your personal preference.
Flexible Trigger Conditions: Select from a variety of trigger conditions based on MACD and signal line behaviors over a specified number of bars back.
Visual Signal Indicators: Bullish and bearish signals are marked with upward and downward triangles, making it easy to spot potential entry or exit points.
Detailed Trigger Descriptions: A comprehensive table lists all available triggers and their descriptions, aiding in selection and understanding of each trigger's mechanism.
Configuration Options
Bullish and Bearish Colors: Customize the color of the labels for bullish (upward) and bearish (downward) signals.
Trend Lookback Period: Choose how far back (in bars) the indicator should look to determine the trend, affecting the calculation of certain triggers.
Trigger Selection for Bullish and Bearish Signals: Pick specific triggers for both bullish and bearish conditions from a list of 10 different criteria, ranging from MACD crossovers to historical comparisons of MACD, signal line, and histogram values.
Label Size and Font Settings: Adjust the size of the signal labels on the chart and the font size of the trigger descriptions table to ensure readability and fit with your chart layout.
Trigger Descriptions Table Position and Color: Customize the position and color of the trigger descriptions table to match your chart's aesthetic and layout preferences.
Trigger Mechanisms
Trigger 1 to 10: Each trigger corresponds to a specific condition involving the MACD line, signal line, and histogram. These include crossovers, directional changes compared to previous bars, and comparisons of current values to historical values.
Usage
1. Select Trigger Conditions: Choose the desired triggers for bullish and bearish signals based on your trading strategy.
2. Customize Visuals: Set your preferred colors for the bullish and bearish labels, adjust label and font sizes, and configure the trigger descriptions table.
3. Analyze Signals: Watch for the upward (bullish) and downward (bearish) triangles to identify potential trading opportunities based on MACD crossover signals.
Conclusion
The MACD Cross Triangle Indicator offers a customizable and visually intuitive way to leverage MACD crossover signals for trading. With its flexible settings and clear signal indicators, traders can tailor the indicator to fit their strategy and improve their decision-making process on TradingView.
MACD Crossover with +/- FilterThis is to directly target when MACD crosses the Signal line. The purpose of this script is to target a +/- change of 3 in the MACD value after the most recent cross. It uses the value of the MACD line and holds it until a value of 3.00 + or - a crossover or crossunder happens. That's the significance of the red and green circles that appear on the chart. This is not financial advice, but I wanted to recreate what a friend of mine was doing manually and automate it for him.
The first circle that appears after MACD/SIGNAL lines cross would represent a potential trade idea. The circles after the first one match the intention of the first dot as they meet the condition of more than a value of -3 or +3 as the previous dot.
Inputs:
Standard Inputs as normal MACD (Moving Average Converging Divergence) within TradingView
Fast Length: User can change it to any value they want
Slow Length: User can change it to any value they want
Standard 12, 26, 9 as normal MACD // 9 being signal smoothing
Oscillator and Signal Line moving average type is using EMA's
Timeframe is dependent on user chart.
Circles are used for signaling the change in values. Red indicates a short-term bearish trend. Green indicates a short-term bullish trend.
Tested on lower timeframes:
1m, 3m, 5m, 15m, 60m
Not used as much on higher timeframes. Used for trading futures. This is what I use it for. It can be used for other futures than just NQ or ES, but those 2 are the ones that I've tested. Code it shown below for users to tinker with.
Style of indication symbol can be changed via settings within the indicator in the "Style" tab, as well as location of the symbol(s). Additionally, color can be changed as well, if you prefer different colors.
Not financial advice. Just trade ideas.
OneThingToRuleThemAll [v1.4]This script was created because I wanted to be able to display a contextual chart of commonly used indicators for scalping and swing traders, with the ability to control the visual representation on the charts as their cross-overs, cross-unders, or changes of state happen in real time. Additionally, I wanted the ability to control how or when they are displayed. While looking through other community projects, I found they lacked the ability to full customize the output controls and values used for these indicators.
The script leverages standard RSI/MACD/VWAP/MVWAP/EMA calculations to help a trader visually make more informed decisions on entering or exiting a trade, depending on their understanding on what the indicators represent. Paired with a table directly on the chart, it allows a trader to quickly reference values to make more informed decisions without having to look away from the price action or look through multiple indicator outputs.
The main functionality of the indicator is controlled within the settings directly on the chart. There a user can enable the visual representations, or disable, and configure how they are displayed on the charts by altering their values or style types.
Users have the ability to enable/disable visual representations of:
The indicator chart
RSI Cross-over and RSI Reversals
MACD Uptrends and Downtrends
VWAP Cross-overs and Cross-unders
VWAP Line
MVWAP Cross-overs and Cross-unders
MVWAP Line
EMA Cross-overs and Cross-unders
EMA Line
Some traders like to use these visual indications as thresholds to enter or exit trades. Its best to find out which ones work the best with the security you are trying to trade. Personally, I use the table as a reference in conjunction with the RSI chart indicators to help me decide a logical trailing stop if I am scalping. Some users might like the track EMA200 crossovers, and have visual representations on the chart for when that happens. However, users may use the other indicators in other methods, and this script provides the ability to be able to configure those both visually and by value.
The pine script code is open source and itself is fairly straightforward, it is mostly written to provide the ultimate level of control the the user of the various indicators. Please reach out to me directly if you would like a further understanding of the code and an explanation on anything that may be unclear.
Enjoy :)
-dead1.
MACD of Relative Strenght StrategyMACD Relative Strenght Strategy :
INTRODUCTION :
This strategy is based on two well-known indicators: MACD and Relative Strenght (RS). By coupling them, we obtain powerful buy signals. In fact, the special feature of this strategy is that it creates an indicator from an indicator. Thus, we construct a MACD whose source is the value of the RS. The strategy only takes buy signals, ignoring SHORT signals as they are mostly losers. There's also a money management method enabling us to reinvest part of the profits or reduce the size of orders in the event of substantial losses.
RELATIVE STRENGHT :
RS is an indicator that measures the anomaly between momentum and the assumption of market efficiency. It is used by professionals and is one of the most robust indicators. The idea is to own assets that do better than average, based on their past performance. We calculate RS using this formula :
RS = close/highest_high(RS_Length)
Where highest_high(RS_Length) = highest value of the high over a user-defined time period (which is the RS_Length).
We can thus situate the current price in relation to its highest price over this user-defined period.
MACD (Moving Average Convergence - Divergence) :
This is one of the best-known indicators, measuring the distance between two exponential moving averages : one fast and one slower. A wide distance indicates fast momentum and vice versa. We'll plot the value of this distance and call this line macdline. The MACD uses a third moving average with a lower period than the first two. This last moving average will give a signal when it crosses the macdline. It is therefore constructed using the values of the macdline as its source.
It's important to note that the first two MAs are constructed using RS values as their source. So we've just built an indicator of an indicator. This kind of method is very powerful because it is rarely used and brings value to the strategy.
PARAMETERS :
RS Length : Relative Strength length i.e. the number of candles back to find the highest high and compare the current price with this high. Default is 300.
MACD Fast Length : Relative Strength fast EMA length used to plot the MACD. Default is 14.
MACD Slow Length : Relative Strength slow EMA length used to plot the MACD. Default is 26.
MACD Signal Smoothing : Macdline SMA length used to plot the MACD. Default is 10.
Max risk per trade (in %) : The maximum loss a trade can incur (in percentage of the trade value). Default is 8%.
Fixed Ratio : This is the amount of gain or loss at which the order quantity is changed. Default is 400, meaning that for each $400 gain or loss, the order size is increased or decreased by a user-selected amount.
Increasing Order Amount : This is the amount to be added to or subtracted from orders when the fixed ratio is reached. The default is $200, which means that for every $400 gain, $200 is reinvested in the strategy. On the other hand, for every $400 loss, the order size is reduced by $200.
Initial capital : $1000
Fees : Interactive Broker fees apply to this strategy. They are set at 0.18% of the trade value.
Slippage : 3 ticks or $0.03 per trade. Corresponds to the latency time between the moment the signal is received and the moment the order is executed by the broker.
Important : A bot has been used to test the different parameters and determine which ones maximize return while limiting drawdown. This strategy is the most optimal on BITSTAMP:ETHUSD in 8h timeframe with the parameters set by default.
ENTER RULES :
The entry rules are very simple : we open a long position when the MACD value turns positive. You are therefore LONG when the MACD is green.
EXIT RULES :
We exit a position (whether losing or winning) when the MACD becomes negative, i.e. turns red.
RISK MANAGEMENT :
This strategy can incur losses, so it's important to manage our risks well. If the position is losing and has incurred a loss of -8%, our stop loss is activated to limit losses.
MONEY MANAGEMENT :
The fixed ratio method was used to manage our gains and losses. For each gain of an amount equal to the value of the fixed ratio, we increase the order size by a value defined by the user in the "Increasing order amount" parameter. Similarly, each time we lose an amount equal to the value of the fixed ratio, we decrease the order size by the same user-defined value. This strategy increases both performance and drawdown.
Enjoy the strategy and don't forget to take the trade :)
Dynamic Trend Fusion (DTF)The "Dynamic Trend Fusion" (DTF) indicator is a powerful technical analysis tool for traders. It stands out from other indicators due to its adaptability and ability to provide insights into different trading styles. Users can choose from various trading options such as "Short-term Trading," "Long-term Trading," "Aggressive Short-term," "Conservative Long-term," "Balanced Approach," "High Sensitivity," "Low Sensitivity," "Day Trading," and "Swing Trading." These options allow traders to customize the indicator to suit their specific trading strategies.
DTF combines the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicators, normalizing them to a similar scale for a comprehensive view of market conditions. It then calculates a combined value and smoothes it using a moving average.
One of its standout features is the ability to identify bullish and bearish states, which is represented visually on the chart. When the indicator detects a transition from a bullish to a bearish state or vice versa, the color of the line changes.
Additionally, DTF offers alert conditions, notifying users when the market shifts into a bullish or bearish state, allowing for timely decision-making.
In summary, the DTF indicator sets itself apart by providing traders with a versatile tool that can be tailored to various trading styles and offers clear visual signals for trend changes, enhancing trading precision and efficiency.
Enhanced McClellan Summation Index
The Enhanced McClellan Summation Index (MSI) is a comprehensive tool that transforms the MSI indicator with Heikin-Ashi visualization, offering improved trend analysis and momentum insights. This indicator includes MACD and it's histogram calculations to refine trend signals, minimize false positives and offer additional momentum analysis.
Methodology:
McClellan Summation Index (MSI) -
The MSI begins by calculating the ratio between advancing and declining issues in the specified index.
float decl = 𝘐𝘯𝘥𝘪𝘤𝘦 𝘥𝘦𝘤𝘭𝘪𝘯𝘪𝘯𝘨 𝘪𝘴𝘴𝘶𝘦𝘴
float adv = 𝘐𝘯𝘥𝘪𝘤𝘦 𝘢𝘥𝘷𝘢𝘯𝘤𝘪𝘯𝘨 𝘪𝘴𝘴𝘶𝘦𝘴
float ratio = (adv - decl) / (adv + decl)
It then computes a cumulative sum of the MACD (the difference between a 19-period EMA and a 39-period EMA) of this ratio. The result is a smoothed indicator reflecting market breadth and momentum.
macd(float r) =>
ta.ema(r, 19) - ta.ema(r, 39)
float msi = ta.cum(macd(ratio))
Heikin-Ashi Transformation -
Heikin-Ashi is a technique that uses a modified candlestick formula to create a smoother representation of price action. It averages the open, close, high, and low prices of the current and previous periods. This transformation reduces noise and provides a clearer view of trends.
type bar
float o = open
float h = high
float l = low
float c = close
bar b = bar.new()
float ha_close = math.avg(b.o, b.h, b.l, b.c)
MACD and Histogram -
The Enhanced MSI incorporates MACD and histogram calculations to provide additional momentum analysis and refine trend signals. The MACD represents the difference between the 12-period EMA and the 26-period EMA of the MSI. The histogram is the visual representation of the difference between the MACD and its signal line.
Options:
Index Selection - Choose from TVC:NYA , NASDAQ:NDX , or TVC:XAX to tailor the MSI-HA to the desired market index.
MACD Settings - Adjust the parameters for the MACD calculation to fine-tune the indicator's responsiveness.
Ratio Multiplier - Apply scaling to the MSI to suit different market conditions and indices.
Benefits of Heikin-Ashi -
Smoothed Trends - Heikin-Ashi reduces market noise, providing a more apparent and smoothed representation of trends.
Clearer Patterns - Candlestick patterns are more distinct, aiding in the identification of trend reversals and continuations.
Utility and Use Cases:
Trend & Momentum Analysis - Utilize the tool's Heikin-Ashi visualization for clearer trend identification in confluence with it's MACD and histogram to gain additional insights into the strength and direction of trends, while filtering out potential false positives.
Breadth Analysis - Explore market breadth through the MSI's cumulative breadth indicator, gauging the overall health and strength of the underlying market.
- Alerts Setup Guide -
The Enhanced MSI is a robust indicator that combines the breadth analysis of the McClellan Summation Index with the clarity of Heikin-Ashi visualization and additional momentum insights from MACD and histogram calculations. Its customization options make it adaptable to various indices and market conditions, offering traders a comprehensive tool for trend and momentum analysis.
MACD Pulse CheckThis custom script, titled " MACD Pulse Check ," is a modified and enhanced version of the traditional Moving Average Convergence Divergence (MACD) indicator, commonly used in trading for trend-following and momentum strategies. Here's a breakdown of its features and benefits over the traditional MACD:
Multiple MACD Lines with Different Parameters:
The script calculates six different MACD lines using various combinations of fast, slow, and signal lengths. This diverse range allows for a more comprehensive analysis of the market momentum and trend across different time scales and sensitivities.
Average of MACD Lines:
By averaging these six MACD lines, the script creates a more smoothed and potentially less noisy signal. This can help in reducing false signals and improving the reliability of trend indications.
Sideways Market Detection:
A unique feature of this script is its ability to identify sideways or range-bound markets using a user-defined threshold. This is calculated by comparing the current price to the price five candles ago and seeing if the change is within a certain percentage threshold. Identifying sideways markets is crucial as trend-following strategies like MACD typically perform poorly in these conditions.
Visual and Color-Coded Signals:
The script plots shapes (circles) on the chart, where the color (green for bullish, red for bearish, sideways price action will display as either a dull green or a dull red) quickly indicates the market condition. This visual representation makes it easier to interpret the signals at a glance, and spot sideways price action while still having a general idea of trend.
Benefits for Traders:
Versatility: By averaging multiple MACD lines, traders get a more nuanced view of the market momentum, potentially leading to more informed trading decisions.
Reduced False Signals:
The averaging process and sideways market detection can help in filtering out false or weak signals, which is a common issue with the traditional MACD.
Ease of Use:
The color-coded visual signals simplify the process of identifying market trends and conditions, making the tool accessible even for less experienced traders.
In summary, "MACD Pulse Check" enhances the traditional MACD by providing a more comprehensive, and visually intuitive tool, potentially leading to better trading decisions in varying market conditions. However, it's important to note that no indicator is foolproof and should always be used in conjunction with other analysis methods and sound risk management practices.
MACD_RSI_trend_followingINFO:
This indicator can be used to build-up a strategy for trading of assets which are currently in trending phase.
My preference is to use it on slowly moving assets like GOLD and on higher timeframes, but practice may show that we find more usefull cases.
This script uses two indicators - MACD and RSI, as the timeframe that those are extracted for is configurable (defaults with the Chart TF, but can be any other selected by the user).
The strategy has the following simple idea - buy if any if the conditions below is true:
The selected TF MACD line crosses above the signal line and the TF RSI is above the user selected trigger value
The selected TF MACD line is above the signal line and the TF RSI crosses above the user selected trigger value
Once we're in position we wait for the selected TF MACD line to cross below the signal line, and then we set a SL at the low of that bar
DETAILS and USAGE:
In the current implementation I find two possible use cases for the indicator:
as a stand-alone indicator on the chart which can also fire alerts that can help to determine if we want to manually enter/exit trades based on them
can be used to connect to the Signal input of the TTS (TempalteTradingStrategy) by jason5480 in order to backtest it, thus effectively turning it into a strategy (instructions below in TTS CONNECTIVITY section)
In the example below we see a position opened at the bar after the buy indicator from the script has been triggered, and then later after the SL indicator from the script has been triggered a SL has been set on the lower wick of the closing candle, and the position eventually got closed once the price hit that level. Note that most of the drawing on the example snapshot below are from the TTS indicator following the buy/sell/SL conditions themseves:
Trading period can be selected from the indicator itself to limit to more interesting periods.
Arrow indications are drawn on the chart to indicate the trading conditions met in the script - green arrow for a buy signal indication and orange for LTF crossunder to indicate setting of SL.
SETTINGS:
Leaving all of the settings as in vanilla use case, as both the MACD and RSI indicator's settings follow the default ones for the stand-alone indicators themselves.
The start-end date is a time filter that can be extermely usefull when backtesting different time periods.
Pesonal preference is using the script on a D/W timeframe, while the indicator is configured to use Monthly chart.
The default value of the RSI filter is left to 50, which can be changed. I.e. if the RSI is above 50 we have a regime filter based on the MACD criteria.
EXTERNAL LIBRARIES:
The script uses a couple of external libraries:
HeWhoMustNotBeNamed/enhanced_ta/14 - collection of TA indicators
jason5480/tts_convention/3 - more details about the Template Trading Strategy below
I would like to highly appreciate and credit the work of both HeWhoMustNotBeNamed and jason5480 for providing them to the community.
TTS SETTINGS (NEEDED IF USED TO BACKTEST WITH TTS):
The TempalteTradingStrategy is a strategy script developed in Pine by jason5480, which I recommend for quick turn-around of testing different ideas on a proven and tested framework
I cannot give enough credit to the developer for the efforts put in building of the infrastructure, so I advice everyone that wants to use it first to get familiar with the concept and by checking
by checking jason5480's profile www.tradingview.com
The TTS itself is extremely functional and have a lot of properties, so its functionality is beyond the scope of the current script -
Again, I strongly recommend to be thoroughly epxlored by everyone that plans on using it.
In the nutshell it is a script that can be feed with buy/sell signals from an external indicator script and based on many configuration options it can determine how to execute the trades.
The TTS has many settings that can be applied, so below I will cover only the ones that differ from the default ones, at least according to my testing - do your own research, you may find something even better :)
The current/latest version that I've been using as of writing and testing this script is TTSv48
Settings which differ from the default ones:
from - False (time filter is from the indicator script itself)
Deal Conditions Mode - External (take enter/exit conditions from an external script)
🔌Signal 🛈➡ - MACD_RSI_trend_following: 🔌Signal to TTSv48 (this is the output from the indicator script, according to the TTS convention)
Sat/Sun - true (for crypto, in order to trade 24/7)
Order Type - STOP (perform stop order)
Distance Method - HHLL (HigherHighLowerLow - in order to set the SL according to the strategy definition from above)
The next are just personal preferenes, you can feel free to experiment according to your trading style
Take Profit Targets - 0 (either 100% in or out, no incremental stepping in or out of positions)
Dist Mul|Len Long/Short- 10 (make sure that we don't close on profitable trades by any reason)
Quantity Method - EQUITY (personal backtesting preference is to consider each backtest as a separate portfolio, so determine the position size by 100% of the allocated equity size)
Equity % - 100 (note above)
Dual_MACD_trendingINFO:
This indicator is useful for trending assets, as my preference is for low-frequency trading, thus using BTCUSD on 1D/1W chart
In the current implementation I find two possible use cases for the indicator:
- as a stand-alone indicator on the chart which can also fire alerts that can help to determine if we want to manually enter/exit trades based on the signals from it (1D/1W is good for non-automated trading)
- can be used to connect to the Signal input of the TTS (TempalteTradingStrategy) by jason5480 in order to backtest it, thus effectively turning it into a strategy (instructions below in TTS CONNECTIVITY section)
Trading period can be selected from the indicator itself to limit to more interesting periods.
Arrow indications are drawn on the chart to indicate the trading conditions met in the script - light green for HTF crossover, dark green for LTF crossover and orange for LTF crossunder.
Note that the indicator performs best in trending assets and markets, and it is advisable to use additional indicators to filter the trading conditions when market/asset is expected to move sideways.
DETAILS:
It uses a couple of MACD indicators - one from the current timeframe and one from a higher timeframe, as the crossover/crossunder cases of the MACD line and the signal line indicate the potential entry/exit points.
The strategy has the following flow:
- If the weekly MACD is positive (MACD line is over the signal line) we have a trading window.
- If we have a trading window, we buy when the daily macd line crosses AND closes above the signal line.
- If we are in a position, we await the daily MACD to cross AND close under the signal line, and only then place a stop loss under the wick of that closing candle.
The user can select both the higher (HTF) and lower (LTF) timeframes. Preferably the lower timeframe should be the one that the Chart is on for better visualization.
If one to decide to use the indicator as a strategy, it implements the following buy and sell criterias, which are feed to the TTS, but can be also manually managed via adding alerts from this indicator.
Since usually the LTF is preceeding the crossover compared to the HTF, then my interpretation of the strategy and flow that it follows is allowing two different ways to enter a trade:
- crossover (and bar close) of the macd over the signal line in the HIGH TIMEFRAME (no need to look at the LOWER TIMEFRMAE)
- crossover (and bar close) of the macd over the signal line in the LOW TIMEFRAME, as in this case we need to check also that the macd line is over the signal line for the HIGH TIMEFRAME as well (like a regime filter)
The exit of the trade is based on the lower timeframe MACD only, as we create a stop loss equal to the lower wick of the bar, once the macd line crosses below the signal line on that timeframe
SETTINGS:
All of the indicator's settings are for the vanilla/general case.
User can set all of the MACD parameters for both the higher and lower (current) timeframes, currently left to default of the MACD stand-alone indicator itself.
The start-end date is a time filter that can be extermely usefull when backtesting different time periods.
TTS SETTINGS (NEEDED IF USED TO BACKTEST WITH TTS)
The TempalteTradingStrategy is a strategy script developed in Pine by jason5480, which I recommend for quick turn-around of testing different ideas on a proven and tested framework
I cannot give enough credit to the developer for the efforts put in building of the infrastructure, so I advice everyone that wants to use it first to get familiar with the concept and by checking
by checking jason5480's profile www.tradingview.com
The TTS itself is extremely functional and have a lot of properties, so its functionality is beyond the scope of the current script -
Again, I strongly recommend to be thoroughly epxlored by everyone that plans on using it.
In the nutshell it is a script that can be feed with buy/sell signals from an external indicator script and based on many configuration options it can determine how to execute the trades.
The TTS has many settings that can be applied, so below I will cover only the ones that differ from the default ones, at least according to my testing - do your own research, you may find something even better :)
The current/latest version that I've been using as of writing and testing this script is TTSv48
Settings which differ from the default ones:
- from - False (time filter is from the indicator script itself)
- Deal Conditions Mode - External (take enter/exit conditions from an external script)
- 🔌Signal 🛈➡ - Dual_MACD: 🔌Signal to TTSv48 (this is the output from the indicator script, according to the TTS convention)
- Sat/Sun - true (for crypto, in order to trade 24/7)
- Order Type - STOP (perform stop order)
- Distance Method - HHLL (HigherHighLowerLow - in order to set the SL according to the strategy definition from above)
The next are just personal preferenes, you can feel free to experiment according to your trading style
- Take Profit Targets - 0 (either 100% in or out, no incremental stepping in or out of positions)
- Dist Mul|Len Long/Short- 10 (make sure that we don't close on profitable trades by any reason)
- Quantity Method - EQUITY (personal backtesting preference is to consider each backtest as a separate portfolio, so determine the position size by 100% of the allocated equity size)
- Equity % - 100 (note above)
EXAMPLES:
If used as a stand-alone indicator, the green arrows on the bottom will represent:
- light green - MACD line crossover signal line in the HTF
- darker green - MACD line crossover signal line in the LTF
- orange - MACD line crossunder signal line in the LTF
I recommend enabling the alerts from the script to cover those cases.
If used as an input to the TTS, we'll get more decorations on the chart from the TTS itself.
In the example below we open a trade on the next day of LTF crossover, then a few days later a crossunder in the LTF occurs, so we set a SL at the low of the wick of this day. Few days later the price doesn't recover and hits that SL, so the position is closed.
MACD_base_and_reference_TF//====================================================================================================================
The "MACD_with_reference" indicator aims to illustrate the MACD (Moving Average Convergence Divergence) on two distinct timeframes: the base timeframe (typically the chart's timeframe, e.g., 1D) and the reference timeframe (defaulted to 1W). This tool provides a means to determine momentum shifts within the stock, potentially guiding traders in adjusting or trimming positions.
// ================================================== INFO ==================================================
Key Features of the Indicator:
- Dual Timeframe MACD: Displays MACD on both the primary (base) and higher (reference) timeframes - transparent.
- Momentum Analysis: indication of MACD crossdown of the signal line on the refenence TF to indicate momentum loss on the higher timeframe, guiding decisions to manage positions.
- MACD Line Status: Beneath the chart, a red/green bar line signifies the MACD line's position relative to the signal line on the higher timeframe.
- Alert Creation: Allows for alerts on the MACD and signal line crossdown on the higher timeframe, aiding in planning stop-loss settings for owned stocks.
// ================================================== NOTES ==================================================
The "MACD_with_reference" indicator finds optimal usage in several scenarios:
- Chart Analysis: Replacing the MACD indicator during chart reviews.
- Alert Setup: Setting alerts for owned stocks to plan ahead for stop-loss placements or position closures.
// ================================================== TODO ==================================================
//#endregion ========================================================================================================
// Continue the script code...
Heatmap MACD StrategyHello traders
A customer gave me the idea indirectly after I made an update to that script:
Supertrend MTF Heatmap
Important Notes
The backtest results aren't relevant for this educational script publication.
I used realistic backtesting data but didn't look too much into optimizing the results, as this isn't the point of why I'm publishing this script.
I wanted to showcase that any Heatmap script can be converted into a strategy.
The strategy default settings are:
Initial Capital: 100000 USD
Position Size: 1 contract
Commission Percent: 0.075%
Slippage: 1 tick
No margin/leverage used
For example, those are realistic settings for trading CFD indices with low timeframes, but not the best possible settings for all assets/timeframes.
Concept
The Heatmap MACD Strategy allows selecting one MACD in five different timeframes.
You'll get an exit signal whenever one of the 5 MACDs changes direction.
Then, the strategy re-enters whenever all the MACDs are in the same direction again.
It takes:
long trades when all the 5 MACD histograms are bullish
short trades when all the 5 MACD histograms are bearish
You can select the same timeframe multiple times if you don't need five timeframes.
For example, if you only need the 30min, the 1H, and 2H, you can set your timeframes as follow:
30m
30m
30m
1H
2H
Risk Management Features
Nothing too fancy
All the features below are pips-based
Stop-Loss
Trailing Stop-Loss
Stop-Loss to Breakeven after a certain amount of pips has been reached
Take Profit 1st level and closing X% of the trade
Take Profit 2nd level and close the remaining of the trade
What's next?
I'll publish this script's open-source Pineconnector, ProfitView, and AutoView versions for educational purposes.
Thank you
Dave
MACD AreaThis indicator calculates and displays the cumulative area for each region above and below the zero line in the MACD histogram. This area measurement serves as a momentum metric, where larger cumulative areas indicate stronger momentum. Divergences between the area and price can also potentially indicate an impending reversal. For example, when the stock price makes a higher high but the area makes a lower high, the current momentum may be unsustainable.
Double MACD Pattern 1.0This script is designed to assist traders in identifying potential trading signals and trends based on the MACD indicator. Users can adjust the input parameters to fine-tune the indicator to their trading preferences. When specific conditions are met, alerts are generated to notify the user of potential trading opportunities.
Indicator Description:
The script defines a custom indicator that calculates and plots two sets of Moving Average Convergence Divergence (MACD) lines along with their signal lines.
It allows users to configure various parameters for MACD calculation, such as fast and slow lengths for both MACD 1 and MACD 2, as well as signal lengths for both.
Plotting:
The script plots the MACD lines and signal lines for both MACD 1 and MACD 2 on the chart with different colors and line styles.
It also plots a middle line at zero for reference.
Alerts:
The script defines conditions for generating alerts based on MACD crossover and crossunder events for both MACD 1 and MACD 2.
Alerts are generated for the following scenarios:
A long signal is generated when MACD 1 crosses under its signal line while MACD 2 crosses over its signal line.
A short signal is generated when MACD 1 crosses over its signal line while MACD 2 crosses under its signal line.
An up trend signal is generated when MACD 2 crosses over MACD 1.
A down trend signal is generated when MACD 1 crosses over MACD 2.
Alerts are included in the script to notify users of these specific trading signals.
Please note that this script is meant for educational purposes and should be used cautiously in a real trading environment. It's important to have a thorough understanding of technical analysis and risk management when using such indicators in actual trading.
Weighted Oscillator Convergence DivergenceThe Weighted Oscillator Convergence Divergence (WOCD) aims to help traders identify potential trend reversals or momentum shifts in financial markets by calculating and visualizing the difference between a smoothed oscillator (WMA) value and its exponential moving average (EMA) and simple moving average (SMA) counterparts. This indicator is particularly useful for traders who want an alternative perspective on price momentum and divergence.
Key Features:
Inputs:
Length: The user can specify the number of bars to consider for calculations (default is 9).
Smoothing 1: Defines the smoothing factor for the first smoothed value (default is 5).
Smoothing 2: Specifies the smoothing factor for the second smoothed value (default is 7).
Ma Type: There are three types of moving averages you can choose (Wilder, non-lag, Weighted is by default).
Color Settings: Users can customize the indicator's colors for various elements, such as length, smoothing values, and different sections of the histogram.
Calculation:
WOCD calculates the raw oscillator value by subtracting the close price from a 3-period High, Low, Close (HLC3) moving average.
It then applies smoothing to this raw oscillator value using two different methods: exponential moving average (EMA) and simple moving average (SMA) with user-defined smoothing periods.
Histogram Plot:
The indicator plots a histogram based on the difference between the smoothed oscillator and the first smoothed value.
When the histogram is above zero and rising, it is colored according to the "Above Grow" color setting. When it's above zero and falling, it uses the "Fall" color for visualization.
Similarly, when the histogram is below zero and rising, it is colored according to the "Below Grow" color setting, and when it's below zero and falling, it uses the "Fall" color.
Oscillator and Smoothed Values:
The indicator also plots the smoothed oscillator, smoothed value 1 (EMA-based), and smoothed value 2 (SMA-based) on the chart.
Zero Line:
A horizontal line at zero is drawn on the chart for reference.
How to Use the WOCD Indicator:
Trend Identification: Observe the histogram's direction and color. A rising histogram above zero may indicate bullish momentum, while a falling histogram below zero could signal bearish momentum.
Divergence: Look for divergences between price action and the histogram. When the histogram and price move in opposite directions, it can be a potential reversal signal.
Crossovers: Pay attention to crossovers between the smoothed oscillator and its smoothed counterparts (EMA and SMA). These crossovers can indicate changes in trend strength or direction.
Zero Line: The zero line can act as a reference point. Positive histogram values suggest bullish sentiment, while negative values indicate bearish sentiment.
Comparison to MACD Indicator:
The WOCD indicator shares some similarities with the Moving Average Convergence Divergence (MACD) indicator but also has distinct differences:
Similarities:
Both WOCD and MACD are momentum oscillators designed to identify potential trend reversals and divergences.
They use moving averages (EMA in the case of MACD) to smooth the raw oscillator values.
Both indicators provide histogram representations of the difference between the oscillator and its smoothed counterpart.
Differences:
WOCD uses a 3-period High, Low, Close (HLC3) moving average to calculate the raw oscillator value, whereas MACD uses the difference between two exponential moving averages (usually 12-period and 26-period EMAs).
The smoothing in WOCD employs both EMA and SMA, while MACD exclusively uses EMA.
WOCD allows users to customize colors for various elements, enhancing visual clarity.
Alxuse MACD for tutorialAll abilities of MACD, moreover :
Drawing upper band and lower band & the ability to change values, change colors, turn on/off show.
Crossing MACD line and SIGNAL line in multi timeframe & there are symbols (Circles) with green color (Buy) and red color (Sell) & the ability to change colors, turn on/off show.
Crossing MACD line and SIGNAL line in multi timeframe according to the values of upper band and lower band & there are symbols (Triangles) with green color (Long) and red color (Short) & the ability to change colors, turn on/off show.
The ability used in the alert section and create customized alerts.
To receive valid alerts the replay section , the timeframe of the chart must be the same as the timeframe of the indicator.
MACD (Moving Average Convergence/Divergence)
Definition
MACD is an extremely popular indicator used in technical analysis. MACD can be used to identify aspects of a security's overall trend. Most notably these aspects are momentum, as well as trend direction and duration. What makes MACD so informative is that it is actually the combination of two different types of indicators. First, MACD employs two Moving Averages of varying lengths (which are lagging indicators) to identify trend direction and duration. Then, MACD takes the difference in values between those two Moving Averages (MACD Line) and an EMA of those Moving Averages (Signal Line) and plots that difference between the two lines as a histogram which oscillates above and below a center Zero Line. The histogram is used as a good indication of a security's momentum.
MACD Line is a result of taking a longer term EMA and subtracting it from a shorter term EMA.The most commonly used values are 26 days for the longer term EMA and 12 days for the shorter term EMA, but it is the trader's choice.
The Signal Line.
The Signal Line is an EMA of the MACD Line described in Component 1. The trader can choose what period length EMA to use for the Signal Line however 9 is the most common.
The MACD Histogram.
As time advances, the difference between the MACD Line and Signal Line will continually differ. The MACD histogram takes that difference and plots it into an easily readable histogram. The difference between the two lines oscillates around a Zero Line.
A general interpretation of MACD is that when MACD is positive and the histogram value is increasing, then upside momentum is increasing. When MACD is negative and the histogram value is decreasing, then downside momentum is increasing.
What to look for
The MACD indicator is typically good for identifying three types of basic signals; Signal Line Crossovers, Zero Line Crossovers, and Divergence.
SIGNAL LINE CROSSOVERS
A Signal Line Crossover is the most common signal produced by the MACD. First one must consider that the Signal Line is essentially an indicator of an indicator. The Signal Line is calculating the Moving Average of the MACD Line. Therefore the Signal Line lags behind the MACD line. That being said, on the occasions where the MACD Line crosses above or below the Signal Line, that can signify a potentially strong move.
The strength of the move is what determines the duration of Signal Line Crossover. Understanding and being able to analyze move strength, as well as being able to recognize false signals, is a skill that comes with experience.
The first type of Signal Line Crossover to examine is the Bullish Signal Line Crossover. Bullish Signal Line Crossovers occur when the MACD Line crosses above the Signal Line.
The second type of Signal Line Crossover to examine is the Bearish Signal Line Crossover. Bearish Signal Line Crossovers occur when the MACD Line crosses below the Signal Line.
Zero line crossovers
Zero Line Crossovers have a very similar premise to Signal Line Crossovers. Instead of crossing the Signal Line, Zero Line Crossovers occur when the MACD Line crossed the Zero Line and either becomes positive (above 0) or negative (below 0).
The first type of Zero Line Crossover to examine is the Bullish Zero Line Crossover. Bullish Zero Line Crossovers occur when the MACD Line crosses above the Zero Line and go from negative to positive.
The second type of Zero Line Crossover to examine is the Bearish Zero Line Crossover. Bearish Zero Line Crossovers occur when the MACD Line crosses below the Zero Line and go from positive to negative.
Divergence
Divergence is another signal created by the MACD. Simply put, divergence is when the MACD and actual price are not in agreement.
For example, Bullish Divergence occurs when price records a lower low, but the MACD records a higher low. The movement of price can provide evidence of the current trend, however changes in momentum as evidenced by the MACD can sometimes precede a significant reversal.
Bearish Divergence is, of course, the opposite. Bearish Divergence occurs when price records a higher high while the MACD records a lower high.
Summary
What makes the MACD such a valuable tool for technical analysis is that it is almost like two indicators in one. It can help to identify not just trends, but it can measure momentum as well. It takes two separate lagging indicators and adds the aspect of momentum which is much more active or predictive That kind of versatility is why it has been and is used by trader's and analysts across the entire spectrum of finance.
Despite MACD's obvious attributes, just like with any indicator, the trader or analyst needs to exercise caution. There are just some things that MACD doesn't do well which may tempt a trader regardless. Most notably, traders may be tempted into using MACD as a way to find overbought or oversold conditions. This is not a good idea. Remember, MACD is not bound to a range, so what is considered to be highly positive or negative for one instrument may not translate well to a different instrument.
With sufficient time and experience, almost anybody who wants to analyze chart data should be able to make good use out of the MACD.
The added features to the indicator are made for training, it is advisable to use it with caution in tradings.
