MACDEMASAR Indicator

The MACDEMASAR Indicator tool provides a multi-conditional trend-following system that combines Exponential Moving Averages (EMA), MACD, and Parabolic SAR to identify potential entry points in alignment with the primary market trend.

Usage

The indicator generates signals based on the confluence of three distinct technical components. Users can identify trade opportunities by observing the background highlights and labeled plot shapes.

• Long Signals: Occur when the price is trading above the 200 EMA (defining an uptrend), a MACD bullish crossover occurs while both lines are below the zero level (mean-reversion potential), and the Parabolic SAR is positioned below the closing price.
• Short Signals: Occur when the price is trading below the 200 EMA (defining a downtrend), a MACD bearish crossover occurs while both lines are above the zero level, and the Parabolic SAR is positioned above the closing price.

A common application for risk management is to place a stop loss at the level of the Parabolic SAR dot corresponding to the signal candle.

Details

The script integrates three classic technical analysis concepts to filter out noise and capture momentum within a trend:

1. Trend Filter (EMA): Uses a long-period EMA (default 200) to establish the directional bias.
2. Momentum Oscillator (MACD): Identifies shifts in momentum. By requiring crossovers to happen on the opposite side of the zero line (e.g., a bullish cross below zero), it looks for early momentum shifts within the larger trend.
3. Trend Confirmation (Parabolic SAR): Acts as a secondary confirmation of price action direction and provides potential trailing stop levels.

Settings

MACD Settings

• Fast Length: The period for the shorter-term moving average used in MACD.
• Slow Length: The period for the longer-term moving average used in MACD.
• Source: The price data used for MACD calculations (e.g., Close).
• Signal Smoothing: The smoothing period for the MACD signal line.
• Simple MA (Oscillator): If enabled, uses a Simple Moving Average instead of an EMA for the oscillator components.
• Simple MA (Signal Line): If enabled, uses a Simple Moving Average for the signal line.

EMA Settings

• EMA Source: The price data used for the trend-filtering EMA.
• EMA Length: The lookback period for the trend EMA (defaulted to 200).

SAR Settings

• SAR start value: The initial acceleration factor for the Parabolic SAR.
• SAR increment: The increment step for the acceleration factor.
• SAR Max. Value: The maximum limit for the acceleration factor.

FAQ

How do I interpret the "Long" and "Short" labels? The labels appear when all four conditions (EMA trend, MACD cross, MACD location, and SAR position) are met simultaneously on a bar close.

On which timeframes is this indicator effective? While the concept is designed to be universal, it is most commonly used on trending timeframes. Users should backtest the parameters for their specific asset and timeframe.

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