A MACD Variant with Selectable Moving Average Types

Summary

This MACD variant lets traders select among 11 moving-average types for its fast line, slow line, and trigger line. The default lengths are 12 and 26 for the price averages and 9 for the trigger. It computes the difference between the fast and slow averages, smooths that difference into a trigger line, and uses the resulting histogram crossing above or below zero to signal long or short entries.

The document describes the adaptive VAR average as one way to adjust smoothing and presents the histogram as an alternative trigger to crossing the two MACD lines directly. It offers no performance statistics or comparative evidence that the selectable averages reduce lag or improve accuracy. The stated weaknesses include poor behavior in sideways markets, residual moving-average lag, and missed or false signals. It recommends choosing average types and lengths for the market using backtests, with optional RSI or Bollinger Band confirmation. The published source includes a date window, but its entry conditions do not visibly apply that window.

Key ideas

• The indicator forms a MACD difference from selectable fast and slow moving-average types.
• A smoothed trigger line is subtracted from the MACD difference to create the histogram.
• Crossings of the histogram through zero generate long and short entries.
• The document gives no measured evidence that the alternative averages improve signal quality.
• Choppy markets, indicator lag, and erroneous or missed signals remain important limitations.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.