Hull MACD with Force Index Backcolors

The Hull MACD with Force Index Backcolors indicator provides a low-lag momentum analysis by combining a Hull Moving Average-based MACD with Elder Force Index (EFI) volume-weighted background coloring. This tool helps traders identify trend direction and momentum while confirming the strength of price movements through volume analysis.

Usage

The indicator can be used to identify potential trend reversals and momentum shifts across various timeframes. The core MACD components—the MACD line, signal line, and histogram—function similarly to the traditional MACD but with reduced lag due to the Hull Moving Average integration.

The background colors are driven by the Elder Force Index (EFI):

• Dark Green: EFI is positive and increasing, suggesting strong bullish volume support.
• Light Green: EFI is positive but decreasing, suggesting weakening bullish momentum.
• Dark Red: EFI is negative and decreasing, suggesting strong bearish volume support.
• Light Red: EFI is negative but increasing, suggesting weakening bearish momentum.

Traders can look for alignment between the MACD crossovers and the background colors. For example, a bullish MACD crossover occurring on a dark green background provides a higher confidence signal that the move is supported by volume.

Details

This script replaces the standard exponential moving averages found in a traditional MACD with Hull Moving Averages (HMA). The HMA is designed to reduce lag while maintaining smoothness, making the MACD more responsive to recent price changes.

Additionally, the tool incorporates the Elder Force Index, which is calculated as: Force Index = (Current Close - Previous Close) * Volume By smoothing this value with an EMA, the indicator provides a background visual that represents the "force" behind price movements. The inclusion of horizontal lines at specific levels allows traders to gauge relative volatility and peak height within the MACD pane.

Settings

• Fast MA: Sets the length for the fast Hull Moving Average.
• Slow MA: Sets the length for the slow Hull Moving Average.
• Signal Length: Determines the smoothing length (SMA) of the MACD line to create the signal line.

FAQ

How do I interpret the background colors?

The background colors represent the state of the Elder Force Index. Green shades indicate positive volume-weighted momentum, while red shades indicate negative momentum. Darker shades signify that the momentum is currently accelerating in that direction.

What makes this different from a standard MACD?

This version uses the Hull Moving Average for its calculations instead of the EMA, significantly reducing the lag typically associated with the indicator. It also overlays volume data via the background colors for better confirmation.

How do I access Hull MACD with Force Index Backcolors?

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