MACD Signals Adjusted by ATR to Filter Weak Moves

Summary

This indicator shifts MACD values by the Average True Range (ATR): when MACD is positive, it is shifted downward by ATR; when MACD is negative, it is shifted upward. The adjustment makes a signal stand out only when MACD is large enough relative to the current trading range. The described plot marks cases where the adjusted curve and MACD have the same sign, with an additional condition that MACD slope points in the direction of price movement.

The author also says the adjustment can help show ATR declining near the end of a move, as the shifted curve returns toward the region where MACD currently lies. The document explains the indicator concept but provides no backtest, performance evidence, parameter guidance, or detailed entry and exit rules. Its usefulness as a trading signal therefore remains unverified, and it should be treated as a technical indicator description rather than evidence of a profitable strategy.

Key ideas

• The indicator shifts positive MACD values down by ATR and negative values up by ATR.
• Same-sign readings from MACD and its ATR-shifted curve highlight moves that are large relative to the trading range.
• The described histogram bars also require MACD slope to point in the direction of price movement.
• The author suggests the shift can help track declining ATR near a move's end, but gives no performance tests.

Tags

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