Mirror MACD

The Mirror MACD indicator is a trend-following tool that utilizes dual mirrored EMA-based calculations to identify potential trend shifts and momentum reversals.

Usage

The Mirror MACD can be used to identify entry and exit points based on the interaction between its three primary lines: the MC Line (Blue), the MO Line (Red), and the Signal Line (Green).

• Long Entry: Consider a long position when the MC Line (Blue) crosses above the MO Line (Red).
• Long Exit: A potential exit for a long position occurs when the Signal Line (Green) crosses above the MO Line (Red) while remaining above the MC Line.
• Short Entry: Consider a short position when the MO Line (Red) crosses down through the MC Line or Signal Line, indicating a shift in momentum.

Details

This script is a TradingView implementation of the "Mirror MACD" concept originally found on other platforms like MetaTrader. Unlike a standard MACD which calculates the difference between two EMAs of the closing price, this version calculates the difference between an EMA of the close and an EMA of the open.

The "Mirror" effect is created by plotting both the difference (close EMA - open EMA) and its inverse (open EMA - close EMA). This provides a symmetrical visual representation of price momentum relative to the opening and closing basis of the selected periods.

Settings

• Short Length: The lookback period for the short-term Exponential Moving Average (EMA).
• Long Length: The lookback period for the long-term Exponential Moving Average (EMA).
• Signal Length: The smoothing period used to calculate the Signal Line from the MC Line.

FAQ

How do I access the Mirror MACD?

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

What do the different lines represent?

The MC Line represents the primary momentum calculation, the MO Line is its inverse (mirror), and the Signal Line is a smoothed average of the MC Line used to identify trigger points.

Which markets does this work best on?

While originally designed with Forex markets in mind, it can be applied to any asset class to visualize momentum and trend crossovers.