Advanced MACD

The Advanced MACD indicator provides a highly customizable version of the traditional Moving Average Convergence Divergence oscillator, offering multiple moving average types and volume-weighting capabilities to enhance trend identification and momentum analysis.

Usage

The Usage section focuses on how to leverage the various configurations of the tool to identify market trends and reversals.

• Trend Identification: Use the MACD line and signal line crossovers to identify potential entry and exit points. When the MACD line crosses above the signal line, it suggests bullish momentum.
• Volume Weighting: By enabling the volume-weighted feature, the indicator transforms into a VW-MACD. This helps traders confirm price movements with volume, potentially filtering out weak trends.
• Modified MACD (mMACD): Users can replicate the mMACD described by Adam Grimes by setting the lengths to 3/10/16 and selecting Simple Moving Averages (SMA) for the calculations.
• Stochastic MACD: Enabling the "Stochastic MACD" option applies a stochastic calculation to the MACD values, oscillating the output between fixed bounds for easier overbought/oversold identification.
• Percentage Price Oscillator (PPO): By enabling PPO mode, the indicator outputs percentage differences rather than absolute values, allowing for better comparison across different assets.

Details

The indicator expands on the classic MACD by allowing users to select from various moving average types, including EMA, SMA, RMA, VWMA, WMA, and TEMA for the fast, slow, and signal components.

A unique feature is the "Volume Weighted" mode based on work by Buff Pelz Dormeier. This mode weights the source price by volume before applying the moving averages. If an asset lacks volume data, the script can automatically fall back to using the True Range (TR) as a weighting proxy, ensuring the indicator remains functional across all markets.

Settings

General Settings

• Source: Determines the input data used for calculations (e.g., Close, HL2).
• Fast Length: The period for the fast-moving average.
• Slow Length: The period for the slow-moving average.
• Signal Length: The period for the signal line moving average.

Volume Weighting

• Volume Weighted: Toggles whether volume (or True Range) is used to weight the calculations.
• Volume Length/Power: Adjusts the smoothing and intensity of the volume weighting.
• Use True Range instead of Volume: Options to use TR "Always", "Auto" (if volume is missing), or "Never".

Calculation Types

• Fast/Slow/Signal/VW Type: Allows selection of the moving average method (EMA, SMA, RMA, VWMA, WMA, TEMA) for each specific component.
• Percentage Price Oscillator: Switches the output to a percentage-based scale.

Stochastic MACD

• Stochastic MACD: Toggles the stochastic transformation of the MACD.
• Stochastic Length: The lookback period for the stochastic calculation.
• Stochastic Moving Average Type: The MA type used to smooth the stochastic output.

FAQ

How do I access Advanced MACD?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Can I use this for crypto and forex?

Yes, the indicator is designed to work across all asset classes. In markets like Forex where volume may be unreliable, you can set the "Use True Range" setting to "Auto" or "Always" to maintain the weighted logic.

What is the advantage of using TEMA over EMA?

The Triple Exponential Moving Average (TEMA) reduces lag significantly compared to a standard EMA, providing faster signals during volatile market conditions.