MACD Overlay v1

The MACD Overlay v1 indicator is a technical tool that transforms the traditional MACD oscillator into a price-action overlay to provide context-aware momentum and expansion signals. It integrates phase gating and participation filters to distinguish between high-conviction trends and market noise directly on the chart.

Usage

The indicator can be used to identify trend shifts and momentum bursts without the need for a separate sub-pane. Traders can interpret the signals based on the following visual cues:

• Solid Triangles: These represent a MACD cross combined with market expansion and valid participation. These are the primary execution signals.
• Faded Triangles: Visible only when "Gate by Weakness" is disabled, these indicate a cross and expansion but with low participation (weak volume or effort).
• Gray Dots: These mark filtered crosses where no genuine expansion or sufficient participation was detected, helping traders avoid "chop" and false breakouts.
• Ribbon & Tint: The fast vs. slow value ribbon and optional candle tinting reflect the current regime (bullish/bearish) and the expansion/contraction phase at a glance.

Details

Unlike standard MACD indicators that plot values in a vacuum, MACD Overlay v1 calculates momentum relative to price structure. It offers two distinct value models: a Classic MA-MACD based on EMA/SMA and a VW-MACD based on rolling VWAP. The script uses "Expansion-Only" logic, requiring a true-range burst and histogram slope ignition to confirm a signal. Furthermore, "Weakness-Lite" filtering adaptively checks for RVOL deficits, effort-vs-result failures, and over-extensions relative to ATR to ensure signals are backed by genuine market participation.

Settings

Mode

• Calculation Mode: Select between Classic (standard), VW (Volume Weighted), or Compare (Classic primary with a VW ghost ribbon).

Signals

• Show Signal Cross Markers: Toggles the display of entry triangles.
• Gate triangles by Weakness: When enabled, filters out signals with low participation.
• Expansion-Only (Impulse/Squeeze): Filters for crosses that coincide with market expansion.

Weakness

• Sensitivity: Adjusts the filtering intensity (Off, Auto, or Strict).

Display

• Show Ribbon: Toggles the fast/slow value ribbon on price.
• Show Candle Tint: Toggles price bar coloring based on MACD phase.
• Show Weakness Markers: Toggles the display of gray dots for filtered signals.

Advanced

• Show Channel: Displays a dynamic channel based on the MACD magnitude.
• Style Preset: Changes the visual intensity (Subtle, Normal, or Bold).

FAQ

How do I access MACD Overlay v1?

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

What is the difference between Classic and VW mode?

Classic mode uses standard moving averages (EMA/SMA), while VW mode uses a Rolling Volume Weighted Average Price (VWAP) to account for volume in the momentum calculation.

Does the indicator repaint?

No, the indicator calculates based on closed bars and does not use any future-looking functions or higher-timeframe security calls that cause repainting.