MACD-V+

3 de out.

MACD-V+ Indicator - Advanced Momentum Analysis

The MACD-V+ indicator is an enhanced version of the volatility-normalized MACD methodology developed by Alex Spiroglou. This approach addresses critical limitations of traditional MACD through ATR-based volatility normalization, providing comparable values across time and markets.


What is MACD-V?

MACD-V applies Average True Range (ATR) normalization to traditional MACD, creating a universal momentum indicator that works consistently across all markets and timeframes. The methodology was developed through extensive statistical research analyzing multiple markets and timeframes.

Formula: [(EMA(12) - EMA(26)) / ATR(26)] × 100

This normalization transforms MACD from price-dependent values into standardized momentum readings.


Traditional MACD Limitations

Limitation 1: Non-Comparable Values Across Time
Traditional MACD values cannot be compared across different time periods due to varying price levels. S&P 500 maximum MACD was 1.56 in 1957-1971, but reached 86.31 in 2019-2021 - not indicating 55x stronger momentum, but simply different price scales.

Solution: MACD-V provides comparable historical values where a reading of 100 today has the same mathematical meaning as 100 in any previous period.

Limitation 2: Non-Comparable Across Markets
Traditional MACD cannot compare momentum between different assets. S&P 500 MACD of 65 versus EUR/USD MACD of -0.5 reflects price differences, not relative strength.

Solution: MACD-V creates universal levels that work across all markets. The ±150 extreme levels apply consistently whether analyzing stocks, bonds, commodities, or currencies.

Limitation 3: No Objective Momentum System
Traditional MACD lacks universal overbought or oversold level definitions, making systematic analysis difficult.

Solution: MACD-V provides an objective 7-stage momentum lifecycle system with clearly defined zones and state transitions.

Limitation 4: Signal Line False Signals
In low momentum environments, traditional MACD generates multiple false signals as the line oscillates near zero.

Solution: MACD-V filters signal quality by identifying neutral zones (-50 to +50) where signal reliability is lower.

Limitation 5: Signal Line Timing Lag
During extreme momentum, traditional MACD signal line lags significantly due to large separation from the MACD line.

Solution: MACD-V anticipates timing issues in extreme momentum environments (±150) through zone-based analysis and lifecycle states.


Universal Application

MACD-V+ works across:

• Individual Stocks
  
• Forex Pairs
  
• Commodity Futures
  
• Cryptocurrencies
  
• All Timeframes
  

Key Features

Zone System

• Overbought Zone: Above +150 (extreme bullish momentum)
  
• Rally Zone: +50 to +150 (strong bullish momentum)
  
• Ranging Zone: -50 to +50 (neutral/low momentum)
  
• Rebound Zone: -50 to -150 (strong bearish momentum)
  
• Oversold Zone: Below -150 (extreme bearish momentum)
  

7-Stage Lifecycle States

1. Ranging: Neutral momentum in -50 to +50 zone
   
2. Rallying: Rally zone + MACD above Signal + rising momentum
   
3. Overbought: Extreme zone above +150
   
4. Retracing: Rally zone + MACD below Signal (pullback from overbought)
   
5. Reversing: Rebound zone + MACD below Signal + falling momentum
   
6. Oversold: Extreme zone below -150
   
7. Rebounding: Rebound zone + MACD above Signal (recovery from oversold)
   

Visual Status Display

• Real-Time State Table: Shows current lifecycle state name
  
• Color-Coded States: Blue (Rallying/Rebounding), Red (Overbought/Oversold), Orange (Retracing/Reversing), Gray (Ranging)
  
• Strength Multiplier: Live histogram strength indicator (e.g., "x 1.45")
  

Enhanced Features (Plus)

• Absolute Histogram MA: ATR-length moving average of absolute histogram values for strength measurement
  
• Direction-Aware Display: MA line follows histogram sign (positive above 0, negative below 0)
  
• Strength Multiplier: Current momentum vs. average strength ratio (always positive value)
  
• Histogram Extreme Levels: Short-term overbought/oversold (±40) for pullback detection
  

Chart Legend - Visual Signal Guide

Lines and Histogram

• 🔵 Blue Line: MACD-V value (ATR-normalized momentum)
  
• 🟠 Orange Line: Signal line (9-period EMA of MACD-V)
  
• 📊 Histogram Bars: MACD-V minus Signal line (momentum differential)
  
• Histogram Colors: Green shades (positive momentum), Red shades (negative momentum)
  
• 🟡 Yellow Line: Dynamic MA of absolute histogram values (follows histogram sign)
  

Background Colors

• 🟥 Light Red Background: Extreme overbought zone (MACD-V > +150)
  
• 🟩 Light Green Background: Extreme oversold zone (MACD-V < -150)
  

Horizontal Reference Lines

• ➖ +150 (Gray Dashed): Overbought extreme level
  
• ➖ +50 (Gray Dashed): Rally zone entry level
  
• ➖ 0 (Gray Solid): Zero line - trend separator
  
• ➖ -50 (Gray Dashed): Rebound zone entry level
  
• ➖ -150 (Gray Dashed): Oversold extreme level
  

Optional Histogram Levels

• ➖ +40 (Yellow Dashed): Histogram short-term overbought
  
• ➖ -40 (Yellow Dashed): Histogram short-term oversold
  

Status Table

• 📋 Top-Center Table: Current lifecycle state display
  
• State Name: RANGING / RALLYING / OVERBOUGHT / RETRACING / REVERSING / OVERSOLD / REBOUNDING
  
• Histogram Warning: Short-term overbought/oversold alerts (±40 levels)
  

State Label

• 📊 Label at MACD/Signal Midpoint: Current lifecycle state with strength analysis
  
• State Name: RANGING / RALLYING / OVERBOUGHT / RETRACING / REVERSING / OVERSOLD / REBOUNDING
  
• Strength Multiplier Interpretation:
  - Strong acceleration (>1.75): Powerful momentum, trend continuation likely
  - Moderate progression (1.25-1.75): Normal trend strength
  - Trend continuation (0.75-1.25): Stable momentum near average
  - Watch for reversal (0.25-0.75): Weakening momentum
  - Trend exhaustion (<0.25): Very weak momentum, reversal possible
  

Trading Applications

1. Lifecycle State Trading

• Enter Long: When state changes to "RALLYING" (strong bullish momentum established)
  
• Enter Short: When state changes to "REVERSING" (strong bearish momentum established)
  
• Exit/Reduce: When state reaches "OVERBOUGHT" or "OVERSOLD" (extreme levels)
  
• Avoid Trading: When state is "RANGING" (low momentum, unreliable signals)
  

2. Zone-Based Trading

• Rally Zone (+50 to +150): Look for pullback entries (histogram dips)
  
• Rebound Zone (-50 to -150): Look for bounce entries (histogram rises)
  
• Extreme Zones (±150+): Prepare for reversal or take profits
  
• Ranging Zone (-50 to +50): Wait for breakout confirmation
  

3. Signal Line Crossovers

• Bullish Cross: MACD-V crosses above Signal line (momentum shift up)
  
• Bearish Cross: MACD-V crosses below Signal line (momentum shift down)
  
• Quality Filter: Trust crossovers in Rally/Rebound zones, ignore in Ranging zone
  

4. Zero Line Crosses

• Cross Above 0: Transition to bullish regime
  
• Cross Below 0: Transition to bearish regime
  
• Trend Confirmation: Strong trends keep MACD-V on same side of zero
  

5. Histogram Extreme Strategy

• Above +40: Short-term overbought - potential pullback
  
• Below -40: Short-term oversold - potential bounce
  
• Use with Trend: Buy dips to -40 in uptrend, sell rallies to +40 in downtrend
  

6. Strength Multiplier Analysis

• > 1.75: Strong acceleration - powerful momentum, trend continuation highly likely
  
• 1.25 to 1.75: Moderate progression - normal healthy trend strength
  
• 0.75 to 1.25: Trend continuation - stable momentum near average strength
  
• 0.25 to 0.75: Watch for reversal - momentum weakening significantly
  
• < 0.25: Trend exhaustion - very weak momentum, reversal possible
  

Comprehensive Alert System

Lifecycle State Change Alerts

• Range Entered (low momentum warning)
  
• Rally Started (bullish momentum established)
  
• Overbought Reached (extreme bullish level)
  
• Overbought Exit (leaving extreme zone)
  
• Retracing Started (pullback from overbought)
  
• Reversal Started (bearish momentum established)
  
• Oversold Reached (extreme bearish level)
  
• Oversold Exit (leaving extreme zone)
  
• Rebounding Started (recovery from oversold)
  

Alert Builder Integration
Binary outputs (1/0) for external alert systems:

• Individual state flags for each of 7 lifecycle states
  
• Strength multiplier value for programmatic trend assessment
  

Settings & Parameters

MACD Configuration

• MACD Fast: Fast EMA period (default: 12)
  
• MACD Slow: Slow EMA period (default: 26)
  
• Signal Line: Signal smoothing period (default: 9)
  
• Source: Price source (default: Close)
  

Zone Boundaries

• Overbought: Extreme bullish level (default: 150)
  
• Oversold: Extreme bearish level (default: -150)
  
• Rally: Strong bullish zone entry (default: 50)
  
• Rebound: Strong bearish zone entry (default: -50)
  

Histogram Bounds

• Histogram OB: Short-term overbought (default: 40)
  
• Histogram OS: Short-term oversold (default: -40)
  

Trend Filters

• MA Type: Histogram strength MA calculation method (None / SMA / EMA)
  
• Show Elder Impulse Plus: Bar color system based on EMA(13) + histogram direction
  
• 200 EMA trend: Trend Filter v1 - Bull/Bear classification (adaptive MACD-V levels)
  
• 50/200 EMA 6-stage: Trend Filter v2 - Chuck Dukas Diamond 6-stage market classification
  

Best Practices

Trending Markets

• Focus on "RALLYING" or "REVERSING" states for entries
  
• Use histogram pullbacks (±40) for position additions
  
• Monitor strength multiplier - exit if drops below 0.25
  
• Take profits in extreme zones (±150+)
  
• Yellow MA crossing histogram warns of momentum shift
  

Ranging Markets

• Avoid trading when state is "RANGING"
  
• Wait for clear zone entry (Rally/Rebound zone)
  
• Use shorter timeframes for precision
  
• Reduce position sizes due to lower reliability
  

Multi-Timeframe Analysis

• Higher timeframe: Identify market regime (lifecycle state)
  
• Lower timeframe: Time precise entries (histogram pullbacks)
  
• Alignment: Trade only when both timeframes agree on direction
  

Risk Management

• Reduce position size in extreme zones (±150+)
  
• Use lifecycle state changes for stop-loss placement
  
• Scale out of positions when strength multiplier < 0.25
  
• Avoid counter-trend trades in strong states (RALLYING/REVERSING)
  
• Watch yellow MA - when it crosses below histogram absolute value, momentum weakening
  

Combining with LBR 3/10-V Indicator

MACD-V+ and LBR 3/10-V create a powerful two-timeframe momentum system for strategic direction and tactical timing.

• Strategic Filter: MACD-V+ determines WHETHER to trade (market regime)
  
• Tactical Precision: LBR 3/10-V determines WHEN to enter (timing)
  
• Double Confirmation: Both indicators must agree on direction
  
• Lifecycle Management: Exit when MACD-V+ state changes
  
• Strength Validation: Use MACD-V+ multiplier for position sizing
  
• Extreme Respect: Both hitting extremes = high reversal probability
  

Methodology

MACD-V methodology is based on volatility normalization using Average True Range (ATR). This approach transforms traditional MACD into a universal momentum indicator with statistically-validated zones and objectively-defined states.

The indicator implements:

• ATR-based normalization for cross-market comparability
  
• Statistical analysis for universal zone definitions (±150, ±50)
  
• Lifecycle state system for objective trend identification
  
• Absolute histogram MA with direction-aware visualization (ATR-length period)
  
• Strength multiplier: ratio of current to average absolute momentum (always positive)
  
• Dynamic status table adapting to active trend filters
  

MACD-V+ transforms momentum analysis from subjective interpretation into objective, quantifiable measurements. Combined with LBR 3/10-V for tactical timing, it provides a complete framework for systematic trading across all financial markets and timeframes.

This indicator is designed for educational and analytical purposes. Past performance does not guarantee future results. Always conduct thorough research and consider consulting with financial professionals before making investment decisions.

3 de out.

Notas de Lançamento

Momentum labels updated

4 de out.

Notas de Lançamento

Source: Alex Spiroglou, MACD-V: Volatility Normalised Momentum (May 3, 2022) research paper (CMT Award 2022).

anteontem

Notas de Lançamento

States, warnings and labels improvements.
Code optimizations.

anteontem

Notas de Lançamento

New display setting for momentum label