MACD-TOTAL (MACD-T)

The MACD-TOTAL (MACD-T) indicator provides a comprehensive trend-following and support/resistance framework by combining smoothed MACD components directly onto the price chart. It aims to offer traders a clearer view of market momentum and potential reversal points through the integration of a trend ribbon and dynamic horizontal levels.

Usage

The indicator consists of two primary components designed to simplify trend and level analysis:

• MS-Signal Ribbon: This is a shaded area formed by the relationship between a mid-point moving average and its signal line. A green ribbon indicates a prevailing uptrend, while a red ribbon indicates a downtrend. Traders can use the width and color of this ribbon to gauge the strength and direction of the current market flow.
• Buy/Sell Levels: These are step-like horizontal lines plotted on the chart. These lines act as dynamic support and resistance zones. Long horizontal segments indicate areas where price has spent significant time, suggesting stronger historical significance for support or resistance.
• Trend Reversals: A shift in the MS-Signal ribbon color, combined with price breaking above or below the horizontal "Buy/Sell" levels, can be interpreted as a signal for a potential trend reversal.

Details

The MACD-TOTAL indicator is a spatial adaptation of the standard MACD oscillator. Instead of appearing in a separate pane, it calculates values based on price averages (Fast EMA and Slow EMA) and projects them onto the overlay.

The "MS-Signal" is derived from the average of the fast and slow EMA lines, which is then smoothed to create a signal line. The filling between these two lines visualizes the trend. The "Buy/Sell" plot utilizes the histogram's state and the relationship between the MACD and its signal line to determine horizontal levels that represent price equilibrium or decision points.

Settings

• Fast Length: The period for the shorter Exponential Moving Average (default is 10).
• Slow Length: The period for the longer Exponential Moving Average (default is 26).
• Signal Smoothing: The period used to smooth the MACD components to create the signal line (default is 9).
• Source: The price data used for all calculations (default is Close).

FAQ

How do I interpret the horizontal lines?

The horizontal lines represent key support and resistance levels. The longer a horizontal line remains at a specific price level, the more significant that level is considered for future price reactions.

Can this be used for scalping or long-term investing?

Yes, the indicator is versatile and can be applied to various timeframes. On higher timeframes like 1W or 1D, it helps identify major trend shifts, while on lower timeframes, it can assist in identifying intraday support and resistance levels.

How can I access the MACD-TOTAL (MACD-T)?

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