- Deviation bands to spot unusual volatility
- 9 Moving Average types
- Conditional coloring and line crossings
👉What is MACD?
MACD is a classic, trend-following indicator that uses moving averages to identify changes in momentum. It can be used to identify trend changes, overbought and oversold conditions, and potential reversals.
This feature allows to analyze the same market data on multiple time frames, which can be in help to identify trends and patterns that would not be visible on a single time frame. When using the multi-timeframe feature, it is important to start with the higher time frame and then look for confirmation on the lower time frames. This will help you to avoid false signals. Please note that only timeframes higher than the chart timeframe is supported currently with this feature enabled. Might get updated in the future.
👉Deviation bands to spot unusual volatility:
Deviation bands are plotted around the Signal line that can be in help to identify periods of unusual volatility. When the MACD line crosses outside of the deviation bands, it suggests that the market is becoming more volatile and a strong trend may form in that direction.
👉9 Moving Average types can be used in the script. Each type of moving average offers a unique perspective and can be used in different scenarios to identify market trends.
- SMA (Simple Moving Average): This calculates the average of a selected range of values, by the number of periods in that range.
- SMMA (Smoothed Moving Average): This takes into account all data available and assigns equal weighting to the values.
- EMA (Exponential Moving Average): This places a greater weight and significance on the most recent data points.
- DEMA (Double Exponential Moving Average): This is a faster-moving average that uses a proprietary calculation to reduce the lag in data points.
- TEMA (Triple Exponential Moving Average): This is even quicker than the DEMA, helping traders respond more quickly to changes in trend.
- LSMA (Least Squares Moving Average): This moving average applies least squares regression method to determine the future direction of the trend.
- HMA (Hull Moving Average): This moving average is designed to reduce lag and improve smoothness, providing quicker signals for short-term market movements.
- VWMA (Volume Weighted Moving Average): This assigns more weight to candles with a high volume, reflecting the true average values more accurately in high volume periods.
- WMA (Weighted Moving Average): This assigns more weight to the latest data, but not as much as the EMA.
This feature colors the MACD line line based on it's direction and fills the area between the MACD line and Deviation band edges to highlight the potential volatility and the strength of the momentum. This can be useful to identify when the market is trending strongly and when it is in a more neutral or choppy state.
👉MACD Line - Signal Line crossings:
This is a classic MACD trading signal that occurs when the MACD line crosses above or below the signal line. Crossovers can be used to identify potential trend reversals. This can be a bullish or bearish signal, depending on the direction of the crossover.
Confirming Signals with other indicators:
As with all technical indicators, it is important to confirm potential signals with other analytical tools, such as support and resistance levels, as well as indicators like RSI, MACD, and volume. This helps increase the probability of a successful trade.
Use proper risk management:
When using this or any other indicator, it is crucial to have proper risk management in place. Consider implementing stop-loss levels and thoughtful position sizing.
Combining with other technical indicators:
The indicator can be effectively used alongside other technical indicators to create a comprehensive trading strategy and provide additional confirmation.
Keep in Mind:
Thorough research and backtesting are essential before making any trading decisions. Furthermore, it's crucial to have a solid understanding of the indicator and its behavior. Additionally, incorporating fundamental analysis and considering market sentiment can be vital factors to take into account in your trading approach.
- This is a lagging indicator. Please note that the indicator is using moving averages, which are lagging indicators.
- The indicators within the TradeMaster Lite package aim for simplicity and efficiency, while retaining their original purpose and value. Some settings, functions or visuals may be simpler than expected.
We hold the view that the true path to success is the synergy between the trader and the tool, contrary to the common belief that the tool itself is the sole determinant of profitability. The actual scenario is more nuanced than such an oversimplification. Our aim is to offer useful features that meet the needs of the 21st century and that we actually use.
Everything provided by trademasterindicator – from scripts, tools, and articles to educational materials – is intended solely for educational and informational purposes. Past performance does not assure future returns.
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All our work is for informational and educational purposes only. Past performance does not guarantee future results.
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