Zero-Lag MACD Divergence with Price-Action Confirmation

Summary

This indicator adapts classic MACD divergence by calculating its moving averages with double exponential moving averages, intended to reduce lag. It records qualifying MACD signal-line crossovers and compares crossover values and closing prices across a configurable lookback period, set to 20 in the example. A bearish signal requires a lower MACD crossover value alongside a higher close, with an additional candle-shape or reversal condition. The bullish case uses the opposite relationship and a corresponding price-action filter.

The output assigns negative, positive, or neutral divergence states and displays them as a colored histogram. The example limits calculation to the most recent 5,000 bars by default for faster loading. It explains the signal construction but supplies no backtest, trade rules, or evidence of predictive performance. Divergence can persist or fail, and the crossover, threshold, lookback, and candle filters may behave differently across instruments and timeframes; the signals need independent validation before being used in a trading system.

Key ideas

• The indicator uses double exponential averages to construct a lower-lag MACD variant.
• It compares MACD crossover values and closing prices over a configurable lookback period.
• Candle shape or reversal behavior acts as an extra filter for divergence signals.
• The output distinguishes bearish, bullish, and neutral conditions in a histogram.
• The document offers no performance evidence or complete trading rules.

Tags

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