Normalised Gaussian MACD Heikin Ashi

The Normalised Gaussian MACD Heikin Ashi tool provides a refined approach to momentum analysis by combining Gaussian filtering with a normalized MACD calculation presented through Heikin Ashi candles. This script aims to help traders identify trend continuations, market volatility, and overbought or oversold conditions with reduced noise and improved signal clarity.

Usage

The indicator can be used to identify market trends and potential reversal points through various visual components:

• Heikin Ashi Candles: When enabled, the indicator displays the MACD values as Heikin Ashi candles within the oscillator pane. Color shifts in these candles help identify shifts in momentum more clearly than traditional line charts.
• Histogram Analysis: The histogram shows the difference between the MACD and the signal line. Bright colors indicate strengthening momentum, while darker shades suggest weakening momentum.
• Overbought/Oversold Zones: The script features shaded regions at the extremes (±80 and ±60 levels). Reversal shapes (▲/▼) appear when the indicator exits these extreme zones, signaling potential trend changes.
• Zero Line Crosses: Monitoring the crossover or crossunder of the zero line provides a basic indication of trend direction.
• Alerts: The script includes a comprehensive alert system for zero-line crosses, reversal signals, histogram swings, and MACD/Signal line crossovers.

Details

This tool improves upon the traditional MACD by integrating two primary mathematical enhancements:

• Gaussian Filtering: Instead of standard exponential moving averages, this script applies a Gaussian filter to the source price. This technique uses weighted averages that decrease based on the distance from the current point, resulting in a smoother output that effectively filters out high-frequency market noise while maintaining responsiveness.
• Normalization: The MACD calculation is normalized by dividing the difference between the fast and slow Gaussian filters by the market range (High - Low) and scaling it by 100. This makes the indicator values more consistent across different assets and timeframes by accounting for varying volatility levels.

Settings

Parameters

• Fast Length: Sets the period for the fast Gaussian filter.
• Slow Length: Sets the period for the slow Gaussian filter.
• Source: Determines the price data used for calculations (e.g., Close, HL2).
• Macd Smoothing Length: The length of the Hull Moving Average applied to the raw Gaussian MACD.
• Signal Smoothing: The length of the EMA used to create the signal line.

Visuals

• Show Heikin Ashi Candles: Toggles the visibility of the internal Heikin Ashi candle representation.
• Show MACD and Signal lines: Toggles the visibility of the standard MACD and signal lines.
• Colors: Customization options for primary and secondary up/down colors used for candles and the histogram.

FAQ

How do I interpret the reversal triangles?

The triangles appear when the Heikin Ashi MACD value crosses back from extreme levels (±80), suggesting that a trend might be exhausted and a reversal is starting.

Why use Gaussian filters instead of EMAs?

Gaussian filters provide superior smoothing capabilities compared to traditional moving averages, allowing for a cleaner trend signal without significant lag.

How can I access Normalised Gaussian MACD Heikin Ashi?

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