enhanced MACD

my ‘2 cents’ on the MACD

MACD  values varies from an instrument to other, and from a time frame to other; it makes things much easier for both human and machine algorithms to watch a ‘normalized’ indicator, an ‘oscillating’ indicator in the range of +/- 3 (or so) see image above of German DAX 30, left is weekly chart, right is daily, above is my normalized MACD, below is the common ‘vanila’ MACD, as you can see the vanila values are +400 -500 on weekly vs +200 -100 on daily chart, while the normalized is usually between -2 to 3 in ‘normal’ conditions.

Basically in my proposal, all I did is to ‘normalize’ the MACD value by its standard deviation and average, I also smoothed it by getting its fast exponential average (last 2 or few values)

here’s the code
Parameters:
F / S are the MACD Fast / Slow Parameters,
History is how long the standard deviation is calculated

I suggest to present it as histogram, making positive values in green, negatives in red just like I did in the picture above -feels like chef suggesting how to serve a dish 😀

//created by Ammar Berrou
//www.linkedin.com/in/a-berrou

once avf = max(round(2*F/10),2)
mcd = MACDline[F,S,9](close)
std1 = std[History](mcd)
ea=Average[History](mcd)
mcd2 = ExponentialAverage[avf](mcd)
mcdR = (mcd2-ea)/std1


RETURN mcdR AS "BMACD"

B_MACD.itf 0-2.png