MACD – Moving Average Convergence Divergence. The MACD is calculated by subtracting a 26-day moving average of a security's price from a 12-day moving average of its price. The result is an indicator that oscillates above and below zero. When the MACD is above zero, it means the 12-day moving average is higher than the 26-day moving average. This is bullish as it shows that current expectations (i.e., the 12-day moving average) are more bullish than previous expectations (i.e., the 26-day average). This implies a bullish, or upward, shift in the supply/demand lines. When the MACD falls below zero, it means that the 12-day moving average is less than the 26-day moving average, implying a bearish shift in the supply/demand lines. A 9-day moving average of the MACD (not of the security's price) is usually plotted on top of the MACD indicator. This line is referred to as the "signal" line. The signal line anticipates the convergence of the two moving averages (i.e., the movement of the MACD toward the zero line). Let's consider the rational behind this technique. The MACD is the difference between two moving averages of price. When the shorter-term moving average rises above the longer-term moving average (i.e., the MACD rises above zero), it means that investor expectations are becoming more bullish (i.e., there has been an upward shift in the supply/demand lines). By plotting a 9-day moving average of the MACD, we can see the changing of expectations (i.e., the shifting of the supply/demand lines) as they occur.
how does this work? I am looking for the ability to set an alert and to notify me everytime there is a bearish or bullish MACD cross?
sketchytraida
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@mizteranderson, use the function cross() to detect crossings, but even better crossover() will only detect if its higher than the 2nd value.
macd_cross = crossover(macd,signal)
abhishektomar1796
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What is a difference between this script and normal MACD ?
Blasik
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@abhishektomar1796, I dont think there is a lot of difference... Maybe a slight different Moving Average but maybe the Author can let us know @sketchytraida
hendolphinlanghaus
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Confused as to why the input lengths differ from the description (8,16,11 compared to the standard 12,26,9). The result seems so react quicker to movements but... why? Thanks :)
Dienekes_Krypto
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This indicator seems pretty good! I would just have a question. Is it possible to set an aler when the "MacdSE -2 or +2" appears? I am not too sure what it means either :)
thanks!
Flamegame
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This indicator sometimes changes the outline color of candles e.g. green candle with red outline. What does the outline represent in terms of price action?
pranshusingh
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AWESOME BOSS
CryptoGod88
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@HPotter i know you don't answer questions much for old scripts like this but just curious can the Heiken Ashi candles be used with this or regular is better?