ESTOCÁSTICO + NORMALIZED MACD=== INTRO ===
This is a 2 in 1 indicator, STOCHASTIC + NORMALIZED MACD.
I release this script as public because both stochastic and normalized macd are public, so I cannot find any reason to post it as private :)
=== USAGE ===
You can use any of the indicators by itself as usual, stochastic as a oversold/overbought indicator as a momentum/trend indicator.
Usually, crossovers are used for LONG/SHORT entries.
I added dots for crossovers as well as background colors to show movement direction when both indicators agree: green = bullish, red = bearish and orange = range/consolidation.
=== SETTINGS ===
Default settings for both indicators have been changed (but they're of course configurable), to make them work better together.
You can also change NMACD moving average time to SMA or WMA instead of SMA, SMA is really slow for me but give it a try, WMA is more aggressive.
=== RECOMMENDATIONS ===
Always look for higher timeframes, for example, if you're trading 1h, don't try to catch a 1H "ALL GREEN" LONG while 4H is "ALL RED" because otherwise you're just "trying" to catch a bounce in the 1H chart that could never happen, always trade with the main trend.
Try to catch both crossovers in the opposite area, ex: try to LONG when both indicators are below 50 and SHORT above.
I did not test divergences on this indicator, as the MACD is normalized i prefer to use a standard MACD for that, but you can use the stochastic for sure.
Indicator
