Reverse MACD Cross

The CT Reverse MACD Cross indicator projects the specific price levels required for various MACD crossovers and trend changes directly onto your chart.

Usage

The Usage section describes how the script can be used to anticipate indicator shifts rather than reacting to lagging histogram changes. By plotting these critical levels on the price pane, traders can identify the exact price targets needed to trigger specific MACD events.

• Trend Monitoring: Use the MACD Eq line to see the price level required for the MACD to continue rising or falling.
• Anticipating Crosses: The indicator plots levels for EMA or SMA signal line crossovers, allowing you to set price-based entry or exit targets before the cross actually occurs on the traditional oscillator.
• Zero Line Reversals: Identify the price level needed for the MACD to cross its zero line, signaling a shift in long-term momentum.
• Infobox Analysis: An on-screen display provides real-time numerical values for these critical levels, changing color based on whether the MACD is currently rising or falling.

Details

The CT Reverse MACD Cross is built upon the mathematical "reverse" calculation of the Moving Average Convergence Divergence (MACD). While a standard MACD calculates a value based on price, this tool solves for the price ($P$) required to achieve a specific MACD state.

It specifically calculates:

1. The price where the MACD value remains unchanged (Equilibrium).
2. The price where the MACD crosses its Signal Line (EMA or SMA).
3. The price where the MACD reaches zero.

This implementation extends the logic originally explored by technical analysts like Gerald Appel and Johny Dough, providing a comprehensive "price-action" view of oscillator momentum.

Settings

MACD Properties

• Price Source: The price data used for calculations (default is Close).
• MACD Fast Period: The period for the short-term EMA.
• MACD Slow Period: The period for the long-term EMA.

MACD eq Line Plot Settings

• Show MACD eq: Toggles the visibility of the equilibrium price level.
• Color Type: Choose between a single color or dual colors based on price relation.
• Line Width: Adjusts the thickness of the equilibrium line.

EMA/SMA Signal Line Settings

• Show EMA/SMA Signal Line Crossover: Toggles the price levels for signal line crosses.
• MA Length: The smoothing period for the signal line.
• Color Properties: Customizes the visual output for rising or falling crossover levels.

Infobox Properties

• Decimal Places: Sets the precision for numerical values in the infobox.
• Offset: Adjusts the horizontal position of the infobox relative to the last bar.
• BG Colors: Customizes the background color of the box based on MACD direction.

FAQ

How do I use the MACD Eq line?

The MACD Eq (Equilibrium) line shows the price level where the MACD would stay at its current value. If price stays above this line, the MACD continues to rise; if it stays below, the MACD falls.

Can I set alerts for these levels?

Yes, the script includes built-in alert conditions for crossovers and crossunders of the MACD and its signal lines (both EMA and SMA variants).

How can I access CT Reverse MACD Cross?

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