Digital MACD_v1

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Author: Digital MACD rewritten by CrazyChart
Digital MACD_v1

This script functions as a specialized technical analysis tool designed to identify momentum and price trends by calculating a "Digital MACD." Unlike standard indicators that might use simple moving averages, this tool employs a sophisticated mathematical weighting system to interpret market data.

Core Logic Overview

The indicator operates by analyzing historical price data (specifically closing prices) and processing them through two distinct weighted layers. It then compares these layers to produce a visual representation of the market's current sentiment.

How the Calculation Works

  1. Dual Weighting System: The script looks back at a specific window of recent price bars. It applies two different sets of unique multipliers (weights) to these prices:

    • The First Layer (Value 1): This acts as one component of the momentum calculation.
    • The Second Layer (Value 2): This acts as the counter-component.
    • Both layers use highly specific decimal coefficients for every single bar in the lookback period. These coefficients determine how much "importance" is given to each past price point.

  2. The Difference Calculation (The Histogram): The script subtracts the second weighted value from the first. The result of this subtraction is plotted on your chart as a Histogram. This histogram represents the immediate "digital" momentum; when it rises, it suggests upward pressure, and when it falls, it suggests downward pressure.

  3. Signal Smoothing: To make the data easier to read and to filter out "market noise," the script takes that histogram result and runs it through a secondary calculation known as a Moving Average.

    • It looks at a user-defined period (the Signal Map Period) to calculate an average of the histogram values.
    • This result is plotted as a Line on the chart.

Practical Interpretation

By observing the relationship between the YellowGreen Histogram and the White Line, traders can identify trends:

  • The Histogram shows you the raw, weighted momentum of the price action.
  • The Line acts as a smoother guide, helping to confirm if that momentum is sustaining over a short period or beginning to exhaust.

In summary, the logic transforms raw price history into a smoothed momentum map by using precise mathematical weighting to separate underlying price trends from temporary fluctuations.

Miscellaneous
Implements a curve of type %1
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Digital MACD_v1 
/*-----------------------------+
|			       |
| Shared by www.Aptrafx.com    |
|			       |
+------------------------------*/

//+------------------------------------------------------------------+
//|                                                 Digital MACD.mq4 |
//|                             Digital MACD rewritten by CrazyChart |
//|                                                                  |
//+------------------------------------------------------------------+
#property copyright "Digital MACD rewritten by CrazyChart"
#property link      " "

#property indicator_separate_window
#property indicator_buffers 2
#property indicator_color1 YellowGreen
#property indicator_color2 White
//---- input parameters
extern int       CountBars=300;
extern int       SignalMAPeriod=5;
//---- buffers
double ExtGraph[];
double ExtSignal[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function                         |
//+------------------------------------------------------------------+
int init()
  {
//---- indicators
   SetIndexStyle(0,DRAW_HISTOGRAM);
   SetIndexBuffer(0,ExtGraph);
   SetIndexStyle(1,DRAW_LINE);
   SetIndexBuffer(1,ExtSignal);
//----
   return(0);
  }
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function                       |
//+------------------------------------------------------------------+
int deinit()
  {
//---- TODO: add your code here
   
//----
   return(0);
  }
//+------------------------------------------------------------------+
//| Custom indicator iteration function                              |
//+------------------------------------------------------------------+
int start()
  {
   int    counted_bars=IndicatorCounted();
//---- TODO: add your code here
  int shift,cnt,loop,AccountedBars;
  double value1,value2,AVG;
  bool firstTime=true;
if (firstTime) {
   AccountedBars = Bars-CountBars;
   loop = CountBars-SignalMAPeriod-1;
   firstTime=false;
 };

for  (shift=Bars-2;shift>=0;shift--) {
value1 = 
 0.2149840610*Close[shift+0]
+0.2065763732*Close[shift+1]
+0.1903728890*Close[shift+2]
+0.1675422436*Close[shift+3]
+0.1397053150*Close[shift+4]
+0.1087951881*Close[shift+5]
+0.0768869405*Close[shift+6]
+0.0460244906*Close[shift+7]
+0.0180517395*Close[shift+8]
-0.0055294579*Close[shift+9]
-0.0236660212*Close[shift+10]
-0.0358140055*Close[shift+11]
-0.0419497760*Close[shift+12]
-0.0425331450*Close[shift+13]
-0.0384279507*Close[shift+14]
-0.0307917433*Close[shift+15]
-0.0209443384*Close[shift+16]
-0.0102335925*Close[shift+17]
+0.0000932767*Close[shift+18]
+0.0089950015*Close[shift+19]
+0.0157131144*Close[shift+20]
+0.0198149331*Close[shift+21]
+0.0211989019*Close[shift+22]
+0.0200639819*Close[shift+23]
+0.0168532934*Close[shift+24]
+0.0121825067*Close[shift+25]
+0.0067474241*Close[shift+26]
+0.0012444305*Close[shift+27]
-0.0037087682*Close[shift+28]
-0.0076300416*Close[shift+29]
-0.0102110543*Close[shift+30]
-0.0113306266*Close[shift+31]
-0.0110462105*Close[shift+32]
-0.0095662166*Close[shift+33]
-0.0072080453*Close[shift+34]
-0.0043494435*Close[shift+35]
-0.0013771970*Close[shift+36]
+0.0013575268*Close[shift+37]
+0.0035760416*Close[shift+38]
+0.0050946166*Close[shift+39]
+0.0058339574*Close[shift+40]
+0.0058160431*Close[shift+41]
+0.0051486631*Close[shift+42]
+0.0039984014*Close[shift+43]
+0.0025619380*Close[shift+44]
+0.0010531475*Close[shift+45]
-0.0003481453*Close[shift+46]
-0.0014937154*Close[shift+47]
-0.0022905986*Close[shift+48]
-0.0027000514*Close[shift+49]
-0.0027359080*Close[shift+50]
-0.0024543322*Close[shift+51]
-0.0019409837*Close[shift+52]
-0.0012957482*Close[shift+53]
-0.0006179734*Close[shift+54]
+0.0000057542*Close[shift+55]
+0.0005111297*Close[shift+56]
+0.0008605279*Close[shift+57]
+0.0010441921*Close[shift+58]
+0.0010775684*Close[shift+59]
+0.0009966494*Close[shift+60]
+0.0008537300*Close[shift+61]
+0.0007142855*Close[shift+62]
+0.0006599146*Close[shift+63]
-0.0008151017*Close[shift+64];

value2 = 
 0.0825641231*Close[shift+0]
+0.0822783080*Close[shift+1]
+0.0814249974*Close[shift+2]
+0.0800166909*Close[shift+3]
+0.0780735197*Close[shift+4]
+0.0756232268*Close[shift+5]
+0.0727009740*Close[shift+6]
+0.0693478349*Close[shift+7]
+0.0656105823*Close[shift+8]
+0.0615409157*Close[shift+9]
+0.0571939540*Close[shift+10]
+0.0526285643*Close[shift+11]
+0.0479025123*Close[shift+12]
+0.0430785482*Close[shift+13]
+0.0382152880*Close[shift+14]
+0.0333706133*Close[shift+15]
+0.0286021160*Close[shift+16]
+0.0239614376*Close[shift+17]
+0.0194972056*Close[shift+18]
+0.0152532583*Close[shift+19]
+0.0112682658*Close[shift+20]
+0.0075745482*Close[shift+21]
+0.0041980052*Close[shift+22]
+0.0011588603*Close[shift+23]
-0.0015292889*Close[shift+24]
-0.0038593393*Close[shift+25]
-0.0058303888*Close[shift+26]
-0.0074473108*Close[shift+27]
-0.0087203043*Close[shift+28]
-0.0096645874*Close[shift+29]
-0.0102995666*Close[shift+30]
-0.0106483424*Close[shift+31]
-0.0107374524*Close[shift+32]
-0.0105952115*Close[shift+33]
-0.0102516944*Close[shift+34]
-0.0097377645*Close[shift+35]
-0.0090838346*Close[shift+36]
-0.0083237046*Close[shift+37]
-0.0074804382*Close[shift+38]
-0.0065902734*Close[shift+39]
-0.0056742995*Close[shift+40]
-0.0047554314*Close[shift+41]
-0.0038574209*Close[shift+42]
-0.0029983549*Close[shift+43]
-0.0021924972*Close[shift+44]
-0.0014513858*Close[shift+45]
-0.0007848072*Close[shift+46]
-0.0001995891*Close[shift+47]
+0.0003009728*Close[shift+48]
+0.0007162164*Close[shift+49]
+0.0010478905*Close[shift+50]
+0.0012994016*Close[shift+51]
+0.0014755433*Close[shift+52]
+0.0015824007*Close[shift+53]
+0.0016272598*Close[shift+54]
+0.0016185271*Close[shift+55]
+0.0015648336*Close[shift+56]
+0.0014747659*Close[shift+57]
+0.0013569946*Close[shift+58]
+0.0012193896*Close[shift+59]
+0.0010695971*Close[shift+60]
+0.0009140878*Close[shift+61]
+0.0007591540*Close[shift+62]
+0.0016019033*Close[shift+63];

ExtGraph[shift]=value1-value2;
   if (shift>0) AccountedBars=AccountedBars+1;
};

for (shift=loop;shift>=0;shift--) {
	AVG = 0;
   for (cnt=0;cnt<=SignalMAPeriod-1;cnt++) {
	  AVG = AVG + ExtGraph[shift+cnt];
   };
   ExtSignal[shift]=AVG/SignalMAPeriod;
   if (shift>0) loop = loop-1;       
};

  
  
  
  
   
//----
   return(0);
  }
//+------------------------------------------------------------------+

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