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Color Your Trades: MACD 4C vs the Classic📊 Coloring Momentum: Comparing Standard MACD vs MACD 4C Momentum indicators are a trader’s compass—but not all compasses are created equal. In this post, we compare the classic MACD with the visually enhanced MACD 4C , a four-color histogram tool that adds clarity and nuance to trend and momentum analysis. Let’s break down how both tools work, how we use them at Xuantify, and how you can decide which one fits your strategy best. 🔍 What Are These Indicators? Standard MACD (Moving Average Convergence Divergence) is a time-tested momentum indicator that plots the difference between two EMAs (typically 12 and 26) and a signal line (usually a 9 EMA of the MACD line). It’s simple, effective, and widely used. MACD 4C , developed by vkno422 , builds on the classic MACD by introducing a four-color histogram and divergence detection , making it easier to interpret momentum shifts and trend strength visually. Key Differences: Standard MACD: Two lines + histogram (single color) MACD 4C: Histogram only, but with four colors to show trend strength and direction MACD 4C includes bullish/bearish divergence detection 🧠 How We Use Them at Xuantify We use both indicators—but for different purposes. 1. Standard MACD – Clean Confirmation We use it for classic trend confirmation and crossover signals . It’s great for traders who prefer minimalism and are comfortable interpreting line-based momentum. 2. MACD 4C – Visual Momentum Clarity We use MACD 4C when we want a more intuitive, color-coded view of momentum. The four-color histogram helps us quickly spot trend strength, exhaustion, and divergence. 🧭 Color Coding in MACD 4C MACD 4C uses four histogram colors (default settings): Lime/Green : Bullish momentum building or continuing Red/Maroon : Bearish momentum building or continuing This makes it easier to: Spot momentum shifts Identify trend continuation Detect divergence at a glance ⚙️ Settings That Matter Both indicators allow customization, but MACD 4C offers more visual tuning: MACD 4C: Adjustable fast/slow MA and signal smoothing Toggle divergence detection Color-coded histogram for quick reads Standard MACD: Clean, minimal, and widely supported Best for traders who prefer traditional setups 🔗 Best Combinations with These Indicators We combine MACD tools with: Structure Tools – BOS/CHOCH for context Liquidity Zones – To spot where momentum may reverse Volume Profile – To confirm strength behind moves Fair Value Gaps (FVGs) – For precision entries ⚠️ What to Watch Out For Both indicators are lagging by nature—they rely on moving averages. MACD 4C’s divergence detection can help anticipate reversals, but it’s still best used as a confirmation tool , not a standalone signal. 🔁 Repainting Behavior Both the standard MACD and MACD 4C are non-repainting . Once a histogram bar or crossover is printed, it remains fixed. This makes them reliable for real-time trading and backtesting . ⏳ Lagging or Leading? These are lagging indicators , designed to confirm trends—not predict them. MACD 4C’s divergence feature adds a leading element , but it should always be used with structure and price action for confirmation. 🚀 Final Thoughts If you’re a visual trader who wants more clarity from your momentum tools, MACD 4C is a powerful upgrade. If you prefer simplicity and tradition, the standard MACD still holds its ground. Try both, test them in your strategy, and see which one sharpens your edge.
Education
by Xuantify
An introduction to the MACD indicatorHere is my quick and dirty introduction/explanation of what the Moving Average Convergence Divergence (MACD) indicator………… indicates. The Moving Average Convergence Divergence (MACD) is a trend following momentum indicator that follows the intimate relationship between a 12-Period EMA and a 26-Period EMA on a price chart in whatever timeframe you are in. The MACD indicator is made up of 6 parts, the MACD Line, the Signal Line, the Histogram, the 0.00 Base Line, the Positive Zone and the Negative Zone. As default, the MACD Line is calculated by subtracting the value of a 26-Period EMA from the value of a 12-Period EMA on your chart to give you your MACD Line value. The MACD indicator will give a MACD Line value in whatever timeframe you are in. The Signal Line is a 9-Period EMA of the MACD Line and is used with the MACD Line to generate/trigger Buy and Sell Signals. If the MACD Line crosses ABOVE the Signal Line, that is considered a Buy Signal. If the MACD Line crosses BELOW the Signal Line, that is considered a Sell Signal. Note that Buy and Sell Signals can be generated in both the Positive and Negative Zones The Histogram is a graphical representation of the distance between the MACD Line and the Signal Line (9-Period EMA). Green Histograms will appear above the 0.00 Base Line when the MACD Line crosses ABOVE the Signal Line. The Green Histograms will Increase in size the further the MACD Line moves upwards & away from its Signal Line. The Green Histogram will also lighten in colour if the MACD Line fails to move higher to create a higher Green Histogram Bar. Red Histograms will appear below the 0.00 Base Line when the MACD Line crosses below the Signal Line. The Red Histograms will increase in size the further the MACD Line moves downwards & away from its Signal Line. The Red Histogram will also lighten in colour if the MACD Line fails to move lower to create a lower Red Histogram Bar. The Positive Zone is the area ABOVE the 0.00 Base Line. If the MACD Line crosses above the 0.00 Base Line, this means that a 12-Period EMA is ABOVE a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be ABOVE the 0.00 Base Line when a 12-Period EMA is ABOVE a 26-Period EMA on your price chart. The Negative Zone is the area BELOW the 0.00 Base Line. If the MACD Line crosses below the 0.00 Base Line, this means that a 12-Period EMA is BELOW a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be BELOW the 0.00 Base Line when a 12-Period EMA is BELOW a 26-Period EMA on your price chart. Note that the MACD indicator has no upper limit in the Positive Zone and no lower limit in the Negative Zone. The MACD indicator can also be used to show Divergence between the Price and the MACD Line. In a Bullish scenario, if the Price is making Lower Lows and the MACD Line is making Higher Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Higher Highs and the MACD Line is making Lower Highs then this is potentially Bearish. The MACD indicator can also be used to show Hidden Divergence between the Price and the Histogram. In a Bullish scenario, if the Price is making Higher Lows but the Histogram is making Lower Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Lower Highs but the Histogram is making Higher Highs then this is potentially Bearish. The MACD can sometimes produce false positive as can be seen here where we have Bullish Divergence with the Price Converging with the MACD Line but no real breakout happened. Note that the MACD Line and Signal Line will be in line with the current Candle Wick in whatever timeframe you are in. The MACD indicator is a lagging indicator but it also has the power to be predictive especially with potential upcoming Buy and Sell signals, divergence and when used with other indicators like Volume, the Ichimoku Cloud, Bollinger Bands, MAs or EMAs, RSI, ADX DI to name but a few as these can help complement the MACD signals to help get a much clearer picture as to what is going on and what may happen on your chart in whatever timeframe you are in, because there is a lot of BS, FUD, FOMO and utter crap out there so a little clarity is always helpful ;-) For me the MACD is a very useful indicator with my trading, so I hope you have found this quick and dirty MACD educational post helpful. Happy trading. Notes: MACD Line = 26-Period EMA Value - 12-Period EMA Value = MACD Line Value Signal Line = 9-Period EMA of the MACD Line. Used with the MACD Line to trigger Buy and Sell Signals Histogram = Distance between the MACD Line and the Signal Line 0.00 Base Line = Crossover point to the Positive Zone and/or Negative Zone Positive Zone = a 12-Period EMA is ABOVE a 26-Period EMA on your price chart Negative Zone = a 12-Period EMA is BELOW a 26-Period EMA on your price chart EMA = Exponential Moving Average.
BITSTAMP:BTCUSDEducation
by TradingThroughTheLens
2
Using the Moving Average Convergence Divergence (MACD)MACD – What it is The Moving Average Convergence Divergence (MACD) is the momentum indicator that shows the relationship between two different moving averages: 1. The 12 period exponential moving average – On Tradingview it is the Fast Length. 2. The 26 periods exponential moving average –On Tradingview it is the Slow Length. The MACD line is calculated by subtracting the 26 period EMA from the 12 period EMA. The Signal line is the 9 period exponential moving average. These two lines are then plotted on top of each other. These are the two lines you see when you turn on the MACD indicator. Additionally, there is a histogram that shows the distance between the two lines. Larger bars tell us that the MACD and Signal are further apart. When it comes to candles, size matters. The larger the candle the more momentum the trend has. The histogram will turn green when the MACD line is above 0 (bullish) and it will turn red when the MACD line is below 0 (bearish). Very bearish momentum is shown above. Photo was taken May 23, 2021. How to use the MACD The most important thing to know about the MACD is how to read the relationship between the two lines. I’ve found that the best timeframe to use the MACD with is daily. This is because the MACD is a lagging indicator and using daily data prevents a lot (not all) of false buy and sell signals. These signals are: • When the MACD line crosses above the signal line it is a buy signal • When the MACD line crosses below the signal line it is a sell signal Additionally, it is best to use the MACD in a trending market; a market with a clearly defined up or down trend. Using the MACD with trend lines is a very powerful combination. The reason for this is that if the market is moving sideways, you can see small fluctuations where the MACD and Signal Line cross but the price does not really go anywhere. These are false breakouts. Therefore, these signals are not automatic buys and sells. There are ways of confirming the indications from the MACD chart. One way is a strategy that uses the RSI and MACD together (which is beyond the scope of this text, but I will discuss in my next article). Another way is to use the MACD with the current trend. So, if you are in an uptrend and then you see a bullish cross, then this is confirmation that you are likely to go higher. The same is true in reverse. Also, please note that the cross over happens well after the price either stabilizes or rises. Again, this is because the MACD is a lagging indicator. Leading Indicator? Since the MACD and Signal lines are lagging indicators is there something that can be used in a predictive way? Some traders use the histogram as a way to predict when a reversal will occur. Since the MACD is a momentum indicator it can show us when sell pressure is alleviating. Meaning it might be a good time to buy. This doesn’t always work of course, but with good risk management (stop losses) you can often get into a position well before its breakout. Conversely, it can show you when your long position is running out of steam and can warn you when to get out. MACD Divergence Another useful way to use the MACD is to spot divergences. A bullish divergence, very similar to the RSI, is when the short-term price trend is going down but, the MACD is going up. Bearish divergence, also very similar to the RSI, is when the price trend is going up but, the MACD is going down. Trading this way is sometimes not a good idea because you are trading against the trend. Please practice good risk management if you are trading reversals. Also, notice the buy signal right before the sell signal that is circled. I really want to hammer home the point that the signals are not automatic buys and sells. Price action is a great way to confirm the reversal (to the up or down side) of a trend. Because simply spotting a divergence does not guarantee the price will follow. Final thoughts As you can see there are different ways of successfully using the MACD. I hope I’ve made a few of these ways clear in this beginner guide. Please let me know if you have any questions and if you like it, please hit the thumbs up and be sure to follow for more. Links to my Fibonacci Retracement and RSI guides are below. Thanks for reading!
Education
by zsamochin
126
Learn to Read Chart (MACD & XRP)✅ The MACD line is the 12-day Exponential Moving Average (EMA) less the 26-day EMA. Closing prices are used for these moving averages. A 9-day EMA of the MACD line is plotted with the indicator to act as a signal line and identify turns. The MACD Histogram (Below the chart) represents the difference between MACD and its 9-day EMA, the signal line. The histogram is positive when the MACD line is above its signal line and negative when the MACD line is below its signal line. ✅ MACD's formula: MACD = 12-Period EMA − 26-Period EMA ✅ MACD is often displayed with a histogram which graphs the distance between the MACD and its signal line. If the MACD is above the signal line, the histogram will be above the MACD’s baseline. If the MACD is below its signal line, the histogram will be below the MACD’s baseline. Traders use the MACD’s histogram to identify when bullish or bearish momentum is high. ✅ The box below the chart has 2 lines which alert traders when a crossover happens: Crossovers are more reliable when they conform to the prevailing trend. If the MACD crosses above its signal line following a brief correction within a longer-term uptrend, it qualifies as bullish confirmation. If the MACD crosses below its signal line following a brief move higher within a longer-term downtrend, traders would consider that a bearish confirmation. ✅ TradingView lets you use the MACD for fast and easy forecasting. You can find it in Indicators & Strategies (f(x)) above your chart.
Education
by ShawnMCR
2
What is a bearish divergence?What is the Moving Average Convergence Divergence (MACD) Indicator? The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator. The indicator tells us the relationship between two moving averages of the security price. To determine MACD subtract the 26-period exponential moving average from the 12-period exponential moving average. There is a nine-day exponential moving average of the MACD that is used as the "signal line." Whenever MACD crosses the signal line that is an indication to sell or buy. The histogram indicates strength. Dark green means the bulls are stronger. Light green means the bulls are weak. Dark red means the bears are strong. Light red means the bears are weak. The centerline for MACD is 0. What is a bearish divergence? A bearish divergence occurs when the price rise to a new high but the indicator new peak is lower than the previous high peak. Forecastability of the bearish divergence The bearish divergence indicator predicts a bearish future for the stock. However, do not assume a bearish divergence will be bearish all the time. There is an exception: in a strong bull market, the bearish divergence will transform itself and the uptrend may continue. Thank you for reading! Greenfield Remember to click "Like" and "Follow" to see more articles. Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NYSE:NIOEducation
by GreenfieldAnalysis
13
Moving Averages Crossover Masterclass Part 1Moving Average Convergence Divergence (MACD) Created by Gerald Appel It was designed in order to reveal changes in the direction, strength, momentum, and duration of a trend in a stock’s price It is a trend-following momentum indicator which shows the relationship between two moving averages of a stock’s price As the name suggests, MACD is all about the convergence and divergence of two moving averages Convergence occurs when the moving averages move towards each other while Divergence occurs when the moving averages move away from each other Three main components of MACD Calculation: MACD line, Signal line, and MACD Histogram MACD line – Calculated by subtracting 26-day EMA (Exponential Moving Average) from 12-day EMA. Exponential Moving Average (EMA) is a type of moving average which places a greater weightage on the recent data points when compared to the past data points, making it react more significantly than a simple moving average. Signal line – 9-day EMA of the MACD line is called the signal line Histogram – Histogram is the graphical distance between MACD and the signal line, height used to assess how strong the price is moving in the given direction There are three main parameters of MACD as a whole: Look-back period of long term EMA to be formulated for MACD Look-back period of short term EMA to be formulated for MACD Look-back period of EMA to be formulated for signal line calculation There are many ways MACD can be used to formulate trading strategy, out of which we will be discussing two in this post: 1. Centerline Crossover Centerline: Zero lines above and below which the MACD line oscillates, diving the canvas in bullish and bearish regions Bullish Crossover when MACD line moves above zero i.e. 12-EMA crosses up 26-EMA Bearish Crossover when MACD line moves below zero i.e. 12-EMA crosses down 26-EMA Signal Generation BUY when MACD crosses up 0 while SELL when MACD crosses down 0 2. Signal line crossover The signal line is 9-day EMA of MACD that means it trails the MACD thereby indicating momentum changes in convergence-divergence Bullish crossover when MACD turns up and crosses above the signal line Bearish crossover when MACD turns down and crosses below the signal line Signal Generation BUY when MACD crosses up the signal line and SELL when MACD crosses down the signal line A lot more interesting things can be done using MACD, about which we'll be talking in the next Masterclass on MACD. STAY TUNED! ---------------------------------------------------------------------------------------- Your questions and comments are most welcome. If you find the post useful, please like, share, and follow to make sure that you get more information once published. - Mudrex
BITSTAMP:ETHUSDEducation
by Mudrex
21
How To Trade Histogram IndicatorsHistograms such as MACD histogram or my Ichimoku histogram give two kind of trading signals. One is common and is triggered on each price bar. The other happens less often but is extremely powerful. The common signal is triggered by the slope of the histogram. When the most recent bar is greater than the one before, the slope is bullish. This is saying that bulls have the situation in control and that it is time to buy. When the more recent bar is lower than the one before, the slope is bearish. This shows that bears have control and that it is time to sell. When price action is going in a direction but the histogram in another, it tells us that the trend is losing its strength. Rule #1 Buy or go long when the histogram stops falling and rise a little. Use a protection stop under last support. Rule #2 Sell or go short when the histogram stops rising and falls a little. Use a protection stop above last minor resistance. In lower timeframes, it is not be worth to buy and sell every time the histogram reverses. A change of direction of the histogram incline is much more significant on higher timeframes such as Daily or Weekly. Rule #3 Bearish divergence: Sell or go short when the histogram is reversing from its second lower high and price is on a new high. Place a protection stop above the new high. Rule #4 Bullish divergence: Buy or go long when the histogram is starting to reverse from its second higher low and price is on a new bottom. Place a protection stop under the new low.
SEducation
by cyatophilum
How to Simply Spot MACD Trend and Benefit from Histogram.Welcome back to my another Educational post. I really do appreciate all support I got in my previous Educational material about MACD, so I am bringing you some more useful Education simply explained about MACD . As I was doing my next Bitcoin Technical Analysis, I was looking a bit more into MACD and thought, I would explain to you a little bit more about how MACD works. How trends are creating, when they start or end, what to consider as support or ressistance on fast lane, how to benefit from histogram. Lets start with Histogram. Its really all about those commas, lets start by splitting the histogram to two sides. Positive - upper, when histogram is positive, fast lane is on buy signal. Negative - lower, when histogram is negative, fast lane is on sell signal. In simple histogram shows the overall volume which is in dominance, for example long positive comma represent strong buying volume in one specific timeframe. Histogram also has his own support and ressistance levels. You can also consider Histogram as wave indicator . At Positive histogram, the tallest comma represent ressistance . You can find ressistance when the next comma in uptrend is lower than previous, forming downtrend . You can also find support at Positive histogram, basically when in downtrend is one comma taller than previous one , uptrend is being formed. At Negative histogram its the same thing, just rotated . So the tallest histogram comma represent that support was found forming uptrend . When a next comma is taller than previous one, it means ressistance was found forming downtrend . Lets follow it up by fast (blue) and slow (orange) lane on macd. Fast lane is known as signal line. When is fast lane is above slow lane, this gives a buy signa l and also the slow lane can be considered as support , and as you know each succesful test lead the price higher. When fast is lane is below slow lane , this gives a sell signal and also the slow lane lane can be considered as ressistance , and as you know each unsuccesful test lead price lower . MACD and Histogram are pretty close connected together as they are giving similiar signals, making signal easier to spot together. When MACD lanes are high is harder for them to cross and give buy signal as i ncreasing demand is required , same is valid for low or oversold macd, its easier for low macd lane to give buy signal as less demand is required. I think thats all important information about MACD for now , everything else should be explained on the chart with the help of Legend. Hope you liked this Education about MACD and more close look on histogram and his purpose. None of this contect was copied, and its all written by me. Hope I havent missed anything important , if yes point it in comments . If I have learned you anything that you are able to benefit from and be a bit better trader , let me know by smashing that agree button , each like is very appreciated as I am doing this for FREE and it took me a LOT of time, Thanks a Lot !
BITFINEX:BTCUSDEducation
by TiborVrbovsky
3