Jim's MACD

The Jim's MACD indicator provides a comprehensive momentum-based strategy that filters MACD crossovers using trend and volume-based momentum conditions. By identifying bullish crossovers below the zero line and bearish crossovers above it, the tool aims to capture reversals within an established trend confirmed by a Hull Moving Average (HMA).

Usage

The Jim's MACD indicator is designed to automate or signal high-probability trend-following entries. It uses a combination of MACD histogram direction, signal line positioning, and price relation to a trend filter.

• Long Conditions: A long signal is generated when price is above the Hull Moving Average, the MACD signal line is below zero, and both momentum and the MACD histogram are positive.
• Short Conditions: A short signal is generated when price is below the Hull Moving Average, the MACD signal line is above zero, and both momentum and the MACD histogram are negative.
• Time Filtering: The script includes specific trading windows to avoid low-liquidity periods or end-of-day volatility, specifically targeting active market sessions.

It is recommended to apply a risk-to-reward ratio of at least 2:1 when using these signals to account for market fluctuations and losing trades.

Details

The indicator calculates momentum as the difference between the current price and the price n periods ago. This momentum value is then analyzed for its own rate of change to ensure trend strength. Additionally, it utilizes a Hull Moving Average (HMA) as a primary trend filter. The HMA is known for reducing lag while maintaining smoothness, making it an effective baseline for determining whether the current market environment is bullish or bearish. The MACD logic specifically looks for "mean reversion" style entries by requiring the signal line to be on the opposite side of the zero line relative to the intended trade direction.

Settings

• Check here for tendies: A toggle primarily used for visual or logic confirmation within the strategy.
• Momentum Length: Sets the period used to calculate the price momentum.
• MACD Signal Length: Determines the smoothing period for the MACD signal line.
• HullMA Length: Sets the lookback period for the Hull Moving Average trend filter.
• Source: Determines the price data (e.g., Close, Open, HL2) used for calculations.

FAQ

How do I use the Jim's MACD?

You can use it to identify trend-aligned entries by looking for signals where the MACD histogram and price momentum align with the position of price relative to the Hull Moving Average.

What timeframes are best for this tool?

While it can be applied to various timeframes, it is optimized with specific time-of-day filters that are generally more effective on intraday charts (e.g., 5m, 15m, or 1h).

How can I access this script?

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