MACD_4CZ
Download script
This custom indicator is designed to provide a more visual and nuanced interpretation of the Moving Averages Convergence Divergence (MACD) momentum by utilizing a multi-colored histogram system. While a standard MACD typically shows a single line or bar to represent the distance between two moving averages, this script differentiates market behavior through color-coded signals based on trend direction and momentum shifts.
Core Logic and Mechanics
The tool operates by calculating the difference between two Exponential Moving Averages (EMAs)—a "Fast" average and a "Slow" average—to determine the overall momentum of the price action. The primary logic is divided into three distinct layers:
1. Directional Detection (Above vs. Below Zero) The script first identifies whether the market momentum is positive or negative.
- Positive Momentum: When the MACD value is above zero, the indicator focuses on the green spectrum (LimeGreen and DarkGreen).
- Negative Momentum: When the MACD value is below zero, it switches to the red spectrum (Red and Maroon).
2. Momentum Strength Comparison Unlike standard indicators that show all data in one color, this script compares the current MACD value against the value of the previous bar. It looks for "shifts" in strength:
- If the momentum is increasing (becoming stronger in its current direction), it highlights that growth using a brighter primary color.
- If the momentum is decreasing (weakening or pulling back), it switches to a darker secondary color.
3. Visual Representation By splitting the histogram into four distinct buffers, the tool provides a clear visual hierarchy:
- Bright Colors: Indicate active, strengthening trends where the price is pushing aggressively in one direction.
- Darker Colors: Signal a cooling off or a deceleration in that trend, potentially warning the user of slowing momentum even if the general direction remains the same.
Summary for the User
In essence, this script takes a standard "momentum" tool and adds a layer of visual intelligence. Instead of just telling you where the price is going, it helps you see how strongly it is moving by changing colors based on whether the trend is gaining steam or losing energy. This allows for a quicker visual assessment of market fatigue or acceleration without needing to perform complex manual calculations.
//+------------------------------------------------------------------+
//| MACD_4CZ Custom MACD.mq4 |
//| Copyright © 2004, MetaQuotes Software Corp. |
//| mod. from ASilver MACD534 http://www.metaquotes.net/ik |
//| MACD_4CZ 4colors up/dn over/under zero; www.forexTSD.com |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2004, MetaQuotes Software Corp."
#property link "http://www.metaquotes.net/"
//---- indicator settings
#property indicator_separate_window
#property indicator_buffers 4
#property indicator_color1 LimeGreen
#property indicator_color2 DarkGreen
#property indicator_color3 Red
#property indicator_color4 Maroon
#property indicator_width1 2
#property indicator_width2 2
#property indicator_width3 2
#property indicator_width4 2
#property indicator_level1 0.004
#property indicator_level2 0.002
#property indicator_level3 0.0004
#property indicator_level4 0
#property indicator_level5 -0.0004
#property indicator_level6 -0.002
#property indicator_level7 -0.004
#property indicator_levelcolor SlateGray
#property indicator_levelstyle 2
//---- indicator parameters
extern int FastEMA=5;
extern int SlowEMA=34;
//---- indicator buffers
double green_buffer[];
double DarkGreen_buffer[];
double red_buffer[];
double Maroon_buffer[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- drawing settings
SetIndexStyle(0,DRAW_HISTOGRAM,STYLE_SOLID);
SetIndexBuffer(0,green_buffer);
//----
SetIndexStyle(1,DRAW_HISTOGRAM,STYLE_SOLID);
SetIndexBuffer(1,DarkGreen_buffer);
//----
SetIndexStyle(2,DRAW_HISTOGRAM,STYLE_SOLID);
SetIndexBuffer(2,red_buffer);
//----
SetIndexStyle(3,DRAW_HISTOGRAM,STYLE_SOLID);
SetIndexBuffer(3,Maroon_buffer);
//----
IndicatorDigits(Digits+1);
//---- name for DataWindow and indicator subwindow label
string short_name="MACD("+FastEMA+","+SlowEMA+")";
IndicatorShortName(short_name);
SetIndexLabel(0,short_name);
SetIndexLabel(1,short_name);
SetIndexLabel(2,short_name);
SetIndexLabel(3,short_name);
//---- initialization done
return(0);
}
//+------------------------------------------------------------------+
//| Moving Averages Convergence/Divergence |
//+------------------------------------------------------------------+
int start()
{
double MACD;
int counted_bars=IndicatorCounted();
int i;
//---- check for possible errors
if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
for (i = Bars - Max (counted_bars-1, 1); i>=0; i--) {
MACD=iMA(NULL,0,FastEMA,0,MODE_EMA,PRICE_MEDIAN,i)-
iMA(NULL,0,SlowEMA,0,MODE_EMA,PRICE_MEDIAN,i);
if(MACD>0) {
if ( ( (green_buffer[i+1] != 0) && (MACD >= green_buffer[i+1]) ) ||
( (DarkGreen_buffer[i+1] != 0) && (MACD > DarkGreen_buffer[i+1]) ) ) {
green_buffer[i] = MACD;
DarkGreen_buffer[i] = 0;
}
else {
green_buffer[i] = 0;
DarkGreen_buffer[i] = MACD;}
}
else {
if ( ( (red_buffer[i+1] != 0) && (MACD >= red_buffer[i+1]) ) ||
( (Maroon_buffer[i+1] != 0) && (MACD > Maroon_buffer[i+1]) ) ) {
red_buffer[i] = MACD;
Maroon_buffer[i] = 0;
}
else {
red_buffer[i] = 0;
Maroon_buffer[i] = MACD;
}
}
}
//---- done
return(0);
}
//+------------------------------------------------------------------+
int Max (int val1, int val2) {
if (val1 > val2) return(val1);
return(val2);
}
Comments