Normalized MACD with Alternative Moving Average Types

Summary

This indicator description presents a variation of MACD that lets the user calculate the difference between fast and slow averages using one of four types: simple, exponential, smoothed, or linear weighted. It then normalizes the resulting MACD values to a range from negative one to positive one. The stated purpose is to make the indicator’s output bounded while retaining a comparison between faster and slower averages.

The suggested use is to treat changes in the plotted color as signals. The document does not define the color rules, provide specific parameter settings, or explain how to enter, exit, or manage risk based on those changes. It includes no historical tests or performance evidence, so the signal should be treated as an indicator concept rather than a validated trading strategy. The effects of normalization and average selection on signal timing are also left unexplained.

Key ideas

• The indicator calculates a fast-versus-slow average difference using a selectable average type.
• Available average types include simple, exponential, smoothed, and linear weighted.
• The resulting MACD values are normalized to a range from negative one to positive one.
• Color changes are suggested as signals, but the document does not define or test them.

Tags

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