Stochastic MACD - Slow and Fast

26 февр. 2023 г.

Stochastic MACD - Slow and Fast

The "Stochastic MACD - Slow and Fast" indicator combines two popular technical indicators, the Stochastic Oscillator and the Moving Average Convergence Divergence ( MACD ).

The Stochastic Oscillator is a momentum indicator that measures the current closing position of an asset relative to its recent price range. This indicator helps traders identify possible turning points in an asset's trend, it is used to identify if the market is overbought or oversold.

On the other hand, the MACD is an indicator used to identify the trend and strength of the market and shows the difference between two exponential moving averages ( EMA ) of different periods. The MACD is commonly used to determine the direction of an asset's price trend.

The combination of both indicators can help traders identify market entry and exit opportunities. This indicator has two parts: a slow part and a fast part. The slow part uses input values ​​for the lengths of the moving averages and the length of the signal for the MACD indicator. The fast part uses different input values ​​for the lengths of the moving averages. Also, each part has its own set of line colors and histogram colors for easy visualization.

In general, the "Stochastic MACD - Slow and Fast" indicator is used to identify possible turning points in the trend of an asset. Traders can use the indicator to determine when to enter or exit a position based on the signals generated by the indicator. The stochastic MACD is a variation of the regular MACD that incorporates a stochastic oscillator to provide additional signals.

In summary, this indicator can be useful for those looking for a combination of two popular indicators to help identify trading opportunities.


In addition, parameters were defined to activate or deactivate the graphic signal.

When the Stochastic MACD Slow Line Crosses the Stochastic MACD Slow Signal Line:

Long or Buy = ↑ // The Entry is more Effective if it is made when the signal is below the Zero Trend Line .
Short or Sell = ↓ // The Entry is more Effective if it is made when the signal is above the Zero Trend Line .

When the Fast Stochastic MACD Line Crosses the Slow Stochastic MACD Line:

Long or Buy = ▲ // The Entry is more Effective if it is made when the signal is below the Zero Trend Line .
Short or Sell = ▼ // The Entry is more Effective if it is made when the signal is above the Zero Trend Line .


Taking into account the above, alerts were also defined for possible Purchases or Sales or entries in Long or Short.

COPOSITION AND USE OF THE INDICATOR

This script is an implementation of the Stochastic MACD indicator with two variations - Slow and Fast. It uses a combination of the Stochastic Oscillator and the Moving Average Convergence Divergence (MACD) indicator to identify trend reversals and momentum shifts in the price of an asset.

The Slow version of the Stochastic MACD is built using three inputs - fastLength, slowLength, and signalLength. The fastLength and slowLength are used to calculate two exponential moving averages (EMAs), while the signalLength is used to calculate a signal line as an EMA of the difference between the two EMAs. The Stochastic Oscillator is then applied to the difference between the two EMAs, and the resulting values are plotted on the chart.

The Fast version of the Stochastic MACD is built using the same inputs as the Slow version, but with different values. It uses a shorter fastLength value and a longer slowLength value to generate the two EMAs, and the resulting values are plotted on the chart.

The script also includes inputs for choosing the type of moving average to use (SMA, EMA, etc.), the source of price data (open, close, etc.), the lookback period, and the colors for the lines and histogram bars.

This script can be used in different markets such as forex, indices, and cryptocurrencies for analysis and trading. However, it is important to note that no trading strategy is guaranteed to be profitable, and traders should always conduct their own research and risk management.