WU ADV MACD+

The MACD+ indicator is everything you always wanted from a MACD (but were afraid to ask).

It’s our best attempt at solving three key issues with the conventional MACD — an indicator we love, but recognize isn’t perfect.

Here’s what we improved:
1. Amplitude normalization via logarithmic scaling – This keeps the signal’s amplitude consistent over time, providing a more stable and meaningful visual interpretation across different price levels and volatility regimes.
2. A hysteresis zone around the signal line – This helps filter out noise and prevents false crossovers in sideways markets, reducing whipsaws without missing key trend shifts.
3. Reduced lag in the signal – The conventional MACD uses standard EMAs, which introduces noticeable lag. By using zero-lag EMAs (which, despite the name, aren’t completely lag-free), we reduce that delay and make the indicator more responsive.

The original MACD calculates its lines directly from raw price data in dollars, meaning its amplitude increases as the stock price rises. Our guess as to why the original MACD wasn’t normalized is that the scaling doesn’t affect the crossover points — meaning that, for a given configuration, the strategy’s signals remain unchanged. So why normalize it using logarithmic scaling? Because keeping the signal within a normalized range allows us to preserve historical context, helping us better assess how overbought or oversold a stock might be.

Another improvement we made is something we often use in our own strategies: adding a hysteresis zone around the signal line. If you’re unfamiliar with the term, think of it as a “dead zone” around the signal line. Rather than triggering a crossover every time the MACD line touches the signal, the indicator only turns bullish when the MACD line crosses above the signal line plus a certain gap (alpha), and bearish when it crosses below the signal line minus another gap (beta).

We introduced this feature to address a major flaw in traditional MACD-based strategies: they often flip between bullish and bearish signals in sideways markets. This not only erodes capital, but also damages investor confidence to the point where users stop following the signals altogether.