MACD-V - Volatility(ATR) normalized MACD

10 Okt

The MACD-V indicator modifies the traditional MACD formula by dividing the difference between the two Exponential Moving Averages (EMAs) by the Average True Range (ATR)

The key advantages of this indicator over MACD are:

• Cross-market comparability: The classic MACD gives different readings for different instruments (like a stock versus a commodity) that are not directly comparable. MACD-V's normalization makes momentum readings comparable across different markets.
  
• Time-based stability: Classic MACD readings can't be reliably compared over long periods of time due to changes in an asset's price and volatility. MACD-V's volatility adjustment creates more stable and consistent readings over time.
  
• Reduction of false signals: In sideways or low-momentum markets, the traditional MACD can generate numerous false crossover signals near the zero line. MACD-V filters out these false signals by defining specific "neutral zones," typically between -50 and +50, where crossovers are ignored.
  
• Consistent Thresholds: MACD-V overbought and oversold thresholds (e.g., +150 and -150) are independent of instrument price, allowing for a more objective framework for analyzing momentum.
  
  
  

10 Okt

Nota Keluaran

The MACD-V indicator modifies the traditional MACD formula by dividing the difference between the two Exponential Moving Averages (EMAs) by the Average True Range (ATR)

The key advantages of this indicator over MACD are:

Cross-market comparability:

• The classic MACD gives different readings for different instruments (like a stock versus a commodity) that are not directly comparable. MACD-V's normalization makes momentum readings comparable across different markets.
  
• Time-based stability: Classic MACD readings can't be reliably compared over long periods of time due to changes in an asset's price and volatility. MACD-V's volatility adjustment creates more stable and consistent readings over time.
  
• Reduction of false signals: In sideways or low-momentum markets, the traditional MACD can generate numerous false crossover signals near the zero line. MACD-V filters out these false signals by defining specific "neutral zones," typically between -50 and +50, where crossovers are ignored.
  
• Objective framework: MACD-V establishes universal overbought and oversold thresholds (e.g., +150 and -150), allowing for a more objective framework for analyzing momentum.
  

6 hari lalu

Nota Keluaran

Updated source code to attribute Alex Spiroglou who proposed this indicator in 2015 and published it in the paper "𝗠𝗔𝗖𝗗-𝘃: 𝗩𝗼𝗹𝗮𝘁𝗶𝗹𝗶𝘁𝘆 𝗡𝗼𝗿𝗺𝗮𝗹𝗶𝘀𝗲𝗱 𝗠𝗼𝗺𝗲𝗻𝘁𝘂𝗺"

It received the following Awards:
1. “𝐅𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐀𝐰𝐚𝐫𝐝” (2022),
for advances in Active Investment Management
from the National Association of Active Investment Managers (NAAIM)
2. “𝐂𝐡𝐚𝐫𝐥𝐞𝐬 𝐇. 𝐃𝐨𝐰 𝐀𝐰𝐚𝐫𝐝” (2022)
for outstanding research in Technical Analysis,
from the Chartered Market Technicians Association (CMTA)