MACRS {Lite}

The MACRS {Lite} indicator is a hybrid oscillator designed to provide a smoother and more reactive analysis of market momentum by calculating the Relative Strength Index (RSI) of the Moving Average Convergence Divergence (MACD).

Usage

The tool combines momentum and trend-following principles into a single visual output. The primary component is the RSI of the MACD, which oscillates around a zero line. When the thick oscillator line is above zero and colored green, it indicates bullish momentum; when below zero and colored red, it indicates bearish momentum.

The script also features a built-in Volume Oscillator, displayed as a thick transparent light blue line. Traders can use this to confirm the validity of movements in the main oscillator. An increasing volume trend typically solidifies the current momentum, while a falling volume trend may suggest a lack of conviction or a potential counter-trend move.

Details

The MACRS {Lite} is a streamlined version of the MACD-modulated RSI concept. It calculates the MACD based on user-defined fast and slow lengths and then applies an RSI calculation to that MACD value. By default, the RSI is re-scaled to oscillate between -100 and 100 to align with the zero-midpoint logic. This implementation allows for the detection of overbought and oversold conditions specifically within the context of the MACD's internal momentum.

Settings

• Fast Length: Sets the period for the fast moving average used in the MACD calculation.
• Slow Length: Sets the period for the slow moving average used in the MACD calculation.
• Source: Determines the price data used for calculations (e.g., HLC3, Close).
• Fast = EMA Mode?: Toggles between SMA and EMA for the fast moving average.
• Slow = EMA Mode?: Toggles between SMA and EMA for the slow moving average.
• MACD Rescale %: Adjusts the scale of the MACD to help identify overbought/oversold background fills.
• Enable Volume Oscillator?: Toggles the visibility of the volume-based trend line.
• Increase Vol-Osc Sensitivity?: Applies a square root calculation to the volume oscillator to make it more reactive to spikes.
• Vol-Osc Short/Long Length: Sets the EMA periods for the volume oscillator calculation.
• RSI Length: Sets the lookback period for the RSI applied to the MACD.
• Enable MACD state color fill?: Toggles the background fill between the oscillator and the zero line.

FAQ

How do I interpret the zero line crossovers?

A crossover above zero suggests that the RSI of the MACD is entering positive territory, signaling a bullish shift in momentum. Conversely, a crossunder below zero signals bearish momentum.

What does the Volume Oscillator confirm?

If the MACRS oscillator is rising and the Volume Oscillator is also trending upwards, it confirms strong buying pressure. If they diverge, the current price move may lack the necessary volume to sustain itself.

How can I access this tool?

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