Normalized Smoothed MACD - MetaTrader 5 Script | Forex Indicator Download - MT4/MT5 Resources

The Moving Average Convergence and Divergence , or Moving Average Convergence/Divergence for short, is a trading indicator used in technical analysis, created by Gerald Appel in the late 1970s. It should reveal changes in the strength, direction, momentum, and duration of a stock's price trend.

The MACD indicator (or "oscillator") is a collection of three time series calculated from historical price data, most commonly closing prices. The three series are: the MACD series itself, the "signal" or "average" series, and the "divergence" series, the difference between the two. The difference between the MACD series is the "fast" (short term) exponential moving average (EMA), and the "slow" (longer period) EMA of the price series. The average of the series is the EMA of the MACD series itself.

One thing it may be missing is an understanding of boundaries. This version adds: min/max based bounds.

You can use the color change of the MACD (which roughly corresponds to the slope of the "regular" MACD) or the color change of the signal line (which changes when the signal line crosses the MACD line) as a signal.

PS: Comparison of the "regular" MACD (lower) and this MACD (upper). The comparison should be based on the slope of the regular MACD and signal line crossovers. These changes are reflected as expected (almost exactly like the "regular" MACD - the final miss can only occur due to the smoothing of the normalized MACD). The zero crossovers for the normalized MACD occur in different places, but this is to be expected, and the new crossovers appear to provide warning of trend changes earlier than the regular MACD.

Attachment download

📎 normalized_smoothed_macd.mq5 (10.03 KB)

Source: MQL5 #22769