Indicator
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KINSKI Flexible MACDFlexible MACD (Moving Average Convergence/Divergence) Indicator
The Moving Average Convergence Divergence consists of three elements: two moving averages (the MACD line and the signal line) and a histogram. The blue MACD line is the difference between a longer and a shorter EMA (here 13 and 21 periods preset), the red signal line is an SMA (here 8 preset) on the MACD line. The histogram (green: ascending, red: descending) shows the difference between both lines.
As soon as the blue MACD line crosses the red signal line, circles are generated that indicate an up/down trend. If the red signal line is greater than or equal to the blue MACD line, this indicates a downward trend (red circle). If the blue MACD line is greater than or equal to the red signal line, this indicates an upward trend (green circle).
The special thing about this MACD indicator is the many setting options, especially the definition of the MA variants for MACD (Fast, Slow) and signal. You can define the following MA types: "COVWMA", "DEMA", "EMA", "EHMA", "FRAMA", "HMA", "KAMA", "RMA", "SMA", "SMMA", "VIDYA", "VWMA", "WMA".
You also have the following display options:
- "Up/Down Movements: On/Off" - Shows ascending and descending MACD, signal lines
- "Up/Down Movements: Rising Length" - Defines the length from which ascending or descending lines are detected
- "Bands: On/Off" - Fills the space between MACD and signal lines with colors to indicate up or down trends
- "Bands: Transparency" - sets the transparency of the fill color
Disclaimer: I am not a financial advisor. For purpose educate only. Use at your own risk. Indicator
Indicator
ALT_FLAMES00.00 - alt-flames
component breakdown:
a) various combinations of EMA crossovers taken from the primeval_series to create a complete sequence of background colored-lines that subdivide into a bullish portion
and a bearish portion for directional identification
b) specific macd crossovers for predictive power in the form of directional flames located directly above the chart price (navy & yellow flames)
c) unique fast & slow rsi combinations for momentum + strength in the form of power flames located directly above the chart price (orange, red, green, & lime flames)
when the alternation of flames are used in concert with the sequence of background colors, one can identify impending explosive price action, can better navigate through periods of slower activity, identify where they are currently in the trend's lifecycle and, MOST IMPORTANTLY, improve the TIMELINESS of entry and exit strategies
00.01 - primeval_series - overview
the primeval_series is a group of transformed universally-renowned mathematical constants that have been transformed and embedded into a series of EMAs
each of these EMAs relates in some meaningful way to the "original wave' or 'wave_0': i.e. the wave that began at t=0, when humanity first made technological progress
the transformations made ensure that the inherent linkages to the original wave remain intact while being applicable to the structures inherent to indicator development
for the purposes of the alt-flames indicator, certain numbers selected from the primeval_series exist and are the basis of each ema , MACD and RSI calculation made herein
00.02 - alt-flames - best practices, and ideal targets
for best use: start with the daily timeframe for broad pattern, then use hourly going forward
ideal for swing trades, shorter-term options, and stocks that already have well-established uptrends, but have also started consolidating for 1+ week
patience is required to catch the ideal break, so best to use mildly OTM calls with at least 2 weeks on them before expiry.
for great use: pick out stocks that have recently broken out heavily from their pivot . Do not enter until the retracement from the top has a defined local low
for average use: any sort of intraday play. this tool is meant for swing trades and sustained breakouts. picking out significant bottom reversals.
the MACD portion is not geared for big reversals here. Rather, it is complementary to the EMA sequences, which are at the core of the indicator
not useful for: shorting stocks that are trending downward or that are in sideways trends Indicator
Indicator
P-MACD by DGTPrice and Moving Averages Convergence/Divergence, shortly named as P-MACD
P-MACD is a trend-following momentum indicator that shows the relationship between Price and Long-term Moving Average (PMACD), and the relationship between two Moving Averages (MAMACD). P-MACD is composed of two lines, and an histogram, showing price distance (convergence/divergence) to its Long-term MA (PMACD), showing short-term MA distance (convergence/divergence) to long-term MA (MAMACD), and a histogram showing the difference (momentum) between the PMACD and MAMACD
The PMACD is calculated by dividing the Price to Long-term Moving Average (200-period SMA/EMA) and finally smoothed with 9-period SMA/EMA
- PMACD Line Formula : (Price / SlowMovingAverage -1) * 100 and smoothed with 9-period SMA/EMA
The MAMACD is calculated by dividing the Short-term Moving Average (such as 20 SMA/EMA) to the Long-term Moving Average (such as 200-period SMA/EMA)
- MAMACD Line Formula : (FastMovingAverage / SlowMovingAverage -1) * 100
The Histogram is calculated by subscripting PMACD and MAMACD
- Formula : PMACD - MAMACD
Optional
Trend Cloud calculated based on fast and slow version of MAMACD
What to look for:
- Line Crosses : PMACD Line can function as a trigger(signal) for buy and sell signals. Buy when the PMACD crosses above the MAMACD line and sell - or short - when the PMACD crosses below the MAMACD line
- Base Crosses : PMACD and/or MAMACD crosses above or below Baseline is another way to indicate the trend and momentum. MAMACD crosses of Baseline, MAMACD positive or negative, reflects short-term moving average crosses the long-term moving average and similarly, PMACD crosses of BaseLine, PMACD positive or negative, reflects price crosses a long-term moving average
- Momentum : P-MACD helps investors understand whether the bullish or bearish movement in the price is strengthening or weakening displayed with a histogram which graphs the distance between the PMACD and MAMACD. Additionally, upward momentum is confirmed with a bullish crossover, which occurs when PMACD and/or MAMACD crosses above Baseline. Conversely, downward momentum is confirmed with a bearish crossover, which occurs when PMACD and/or MAMACD crosses below Baseline
- Distance : Prices high above the moving average (MA) or low below it are likely to be remedied in the future by a reverse price movement. The more distant the PMACD is above or below its baseline indicates that the distance between the Price and its SMA is growing (regarding PMACD, You may find a detailed article explained in “Price Distance to its MA” indicator by DGT) . Similarly the more distant the MAMACD is above or below its baseline indicates that the distance between the two SMAs is growing
- Trend : A rising P-MACD indicates an uptrend, while a declining P-MACD indicates a downtrend
MACD vs. P-MACD
MACD measures the relationship between two MAs, while the P-MACD measures both the relationship between price and its MA, and the relationship between two MAs. MAMACD Line of P-MACD If set to same moving average type and same lengths as in MACD will produce the same line as MACD line, only values are represented as percentage with MAMACD. Both measure momentum in a market, but, because they measure different factors, they differentiate from each other even if they have similarities in presentation. P-MACD provides additional insights, not only to MA relation but also to Price and MA relation
Warning : Moving Average are calculated based on past prices, so they are lagging. The longer the time period for the moving average, the greater the lag as well as less sensitive to price changes. This study implements usage of 200-period long-term moving average, which implies that the P-MACD will provide insight especially for long-term trades, more suited for long-term trades, usage of P-MACD for short-term trades is recommend with lower timeframes (1H or lower).
Indicators aim to generate a potential signal/indication of an upcoming opportunity, but, the Indicators themselves do not guarantee the future movement of a given financial instrument, and are most useful when used in combination with other techniques.
Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely
Disclaimer : The script is for informational and educational purposes only. Use of the script does not constitutes professional and/or financial advice. You alone the sole responsibility of evaluating the script output and risks associated with the use of the script. In exchange for using the script, you agree not to hold dgtrd pulsewire user liable for any possible claim for damages arising from any decision you make based on use of the script
Indicator
Price Distance to its MA by DGTPrices high above the moving average (MA) or low below it are likely to be remedied in the future by a reverse price movement as stated in an Article by Denis Alajbeg, Zoran Bubas and Dina Vasic published in International Journal of Economics, Commerce and Management
Here comes a study to indicate the idea of this article, Price Distance to its Moving Averages (P/MA Ratio)
The analysis expressed in the paper indicates that there is a connection between the distance of the prices to moving averages and subsequent returns : portfolios of stocks with lower prices to moving averages generally outperformed portfolios of stocks with higher prices to moving averages. This “overextended” effect is more pronounced when using shorter moving averages of 20 and 50 days, and is especially strong in short-term holding periods like one and two weeks. The highest annual returns are recorded when buying in the range of 0-5% below shorter moving averages of 20/50 days, and 0-10% below longer moving averages of 100/200 days. However, buying very far below almost all moving averages on almost all holding periods produces the lowest returns.
The concept of this study recognizes three different modes of action.
In a clearly established upward trend traders should be buying when prices are near or below the MA line and selling when prices move too far above the MA.
Conversely, in downward trend stocks should be shorted when reaching or going above the moving average and covered when they drop too far below the MA line.
In a sideways movement traders are advised to buy if the price is too low below the moving average and sell when it goes too far above it
Short-term traders can expect to outperform in a one or two week time window if buying stocks with lower prices compared to their 20 and 50 SMA/EMA, one to two-week holding periods is quite high, ranging from 72,09% to 90,61% for the SMA(20, 50) and 85,03% to 87,5% for the EMA(20, 50). The best results for the SMA 20 and 50, on average, are concentrated in the region of 0-5% below the MA for the majority of holding periods. Buying very far below almost all MA in almost all holding periods turns out to be the worst possible option
Candle patterns, momentum could be used in conjunction with this indicator for better results. Try Colored DMI and Ichimoku colored SuperTrend by DGT
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Strategy
Strategy
MACD histogram relative open/closePrelude
This script makes it easy to capture MACD Histogram open/close for automated trading.
There seems to be no "magic" value for MACD Histogram that always works as a cut-off for trade entry/exit, because of the variation in market price over time.
The idea behind this script is to replicate the view of the MACD graph we (humans) see on the screen, in mathematics, so the computer can approximately detect when the curve is opening/closing.
Math
The maths for this is composed of 2 sections -
1. Entry -
i. To trigger entry, we normalize the Histogram value by first determining the lowest and highest values on the MACD curves (MACD, Signal & Hist).
ii. The lowest and highest values are taken over the "Frame of reference" which is a hyperparameter.
iii. Once the frame of reference is determined, the entry cutoff param can be defined with respect to the values from (i) (10% by default)
2. Exit
To trigger an exit, a trader searches for the point where the Histogram starts to drop "steeply".
To convert the notion of "steep" into mathematics -
i. Take the max histogram value reached since last MACD curve flip
ii. Define the cutoff with reference to the value from (i) (30% by default)
Plots
Gray - Dead region
Blue - Histogram opening
Red - Histogram is closing
Notes
A good value for the frame of reference can be estimated by looking at the timescale of the graph you generally work with during manual trading.
For me, that turned out to be ~2.5 hours. (as shown in the above graph)
For a 3-minute ticker, frame of reference = 2.5 * 60 / 3 = 50
Which is the default given in this script.
Ultimately, it is up to you to do grid search and find these hyperparams for the stock and ticker size you're working with.
Also, this script only serves the purpose of detecting the Histogram curve opening/closing.
You may want to add further checks to perform proper trading using MACD.
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Combing in MACD and MTFHi all, I'm trying to wedge in the MACD into a multiple timeframe. Scope is to create:
1) an alert when the MACD across all timeframes is positive,
2) an alert when the MACD across all timeframes is negative, and
3) one when neither of them is applicable.
Would anyone be so kind to give it some thoughts, please?
//@version=2
strategy(" Easy MTF Strategy", overlay=false)
TF_1_time = input("3", "Timeframe 1")
TF_2_time = input("5", "Timeframe 2")
TF_3_time = input("15", "Timeframe 3")
TF_4_time = input("30", "Timeframe 4")
fastLen = input(title="Fast Length", type=integer, defval=12)
slowLen = input(title="Slow Length", type=integer, defval=26)
sigLen = input(title="Signal Length", type=integer, defval=9)
= macd(close, fastLen, slowLen, sigLen)
width = 5
upcolor = green
downcolor = red
neutralcolor = blue
linestyle = line
TF_1 = security(tickerid, TF_1_time, open) < security(tickerid, TF_1_time, close) ? true:false
TF_1_color = TF_1 ? upcolor:downcolor
TF_2 = security(tickerid, TF_2_time, open) < security(tickerid, TF_2_time, close) ? true:false
TF_2_color = TF_2 ? upcolor:downcolor
TF_3 = security(tickerid, TF_3_time, open) < security(tickerid, TF_3_time, close) ? true:false
TF_3_color = TF_3 ? upcolor:downcolor
TF_4 = security(tickerid, TF_4_time, open) < security(tickerid, TF_4_time, close) ? true:false
TF_4_color = TF_4 ? upcolor:downcolor
TF_global = TF_1 and TF_2 and TF_3 and TF_4
TF_global_bear = TF_1 == false and TF_2 == false and TF_3 == false and TF_4 == false
TF_global_color = TF_global ? green : TF_global_bear ? red : white
TF_trigger_width = TF_global ? 6 : width
plot(1, style=linestyle, linewidth=width, color=TF_1_color)
plot(5, style=linestyle, linewidth=width, color=TF_2_color)
plot(10, style=linestyle, linewidth=width, color=TF_3_color)
plot(15, style=linestyle, linewidth=width, color=TF_4_color)
plot(25, style=linestyle, linewidth=4, color=TF_global_color)
exitCondition_Long = TF_global_bear
exitCondition_Short = TF_global
longCondition = TF_global
if (longCondition)
strategy.entry("MTF_Long", strategy.long)
shortCondition = TF_global_bear
if (shortCondition)
strategy.entry("MTF_Short", strategy.short)
strategy.close("MTF_Long", when=exitCondition_Long)
strategy.close("MTF_Short", when=exitCondition_Short) Strategy
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