The MACD-V indicator is the normal version of the (Moving Average Convergence Divergence) indicator but normalized for . It is normalized for in order to compare momentum values across time and across tickers which the normal indicator fails to do.
The formula for the MACD-V is as follows
- Line = [[EMA(12,close) - (26,close)] / ATR(26)] * 100
- Signal Line = (9, )
- Histogram = Line - Signal Line
How to Use
The MACD-V indicator is used to analyze normalized trends. If the line is above 150, it is considered overbought. If the line is below -150, it is considered oversold. Crossovers of the line and the signal line are considered to be points of trend changes as well.
- Customizable Overbought/Oversold boundaries
- Customizable colors
All credit for the idea behind this indicator goes to Alex Spiroglou CMT. His academic paper on the indicator can be found here.
In addition to Alex's idea for the paper, one TradingView user, Mik3Christ3ns3n has created a partial version of it which can be found here.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.