Moving Average Convergence-Divergence (MACD)

This script implements the Moving Average Convergence-Divergence (MACD), a popular momentum indicator used in technical analysis to identify trend direction, momentum shifts, and potential buy/sell signals.

🔹 Key Features
1. Inputs & Customization
MACD Lines Toggle: Enable/disable the MACD and signal lines.

Source Price: Defaults to close but can be adjusted (e.g., open, high, low, hl2).

Fast Length (12): The period for the faster-moving EMA.

Slow Length (26): The period for the slower-moving EMA.

Signal Length (9): The smoothing period for the signal line.

2. Calculations
Computes the MACD Line (fast EMA - slow EMA).

Computes the Signal Line (EMA of the MACD line).

Computes the Histogram (difference between MACD and Signal lines).

3. Visual Indicators
Zero Line: A white horizontal line at 0 for reference.

MACD Line: Plotted in green when above the signal line, red when below.

Signal Line: Displayed as a yellow line.

Histogram:

Green bars when MACD > Signal (bullish momentum).

Red bars when MACD < Signal (bearish momentum).

Background Highlights:

Light green on bullish crossovers (MACD crosses above Signal).

Light red on bearish crossunders (MACD crosses below Signal).

4. Alerts
Triggers when:

Bullish Crossover (MACD crosses above Signal).

Bearish Crossunder (MACD crosses below Signal).

🔹 How Traders Use This Indicator
Trend Identification:

MACD above zero → bullish trend.

MACD below zero → bearish trend.

Momentum Signals:

Bullish Crossover (Buy Signal): MACD crosses above Signal.

Bearish Crossunder (Sell Signal): MACD crosses below Signal.

Divergence (Not in this script, but useful):

Price makes higher highs, but MACD makes lower highs → Potential reversal.

🔹 Strengths of This Script
✅ Clean and Efficient Code – Uses Pine Script v6 best practices.
✅ Customizable Inputs – Adjust lengths and source price.
✅ Clear Visuals – Color-coded for easy interpretation.
✅ Built-in Alerts – For automated trading strategies.
Jul 1
Release Notes
This script implements the Moving Average Convergence-Divergence (MACD), a popular momentum indicator used in technical analysis to identify trend direction, momentum shifts, and potential buy/sell signals.

🔹 Key Features
1. Inputs & Customization
MACD Lines Toggle: Enable/disable the MACD and signal lines.

Source Price: Defaults to close but can be adjusted (e.g., open, high, low, hl2).

Fast Length (12): The period for the faster-moving EMA.

Slow Length (26): The period for the slower-moving EMA.

Signal Length (9): The smoothing period for the signal line.

2. Calculations
Computes the MACD Line (fast EMA - slow EMA).

Computes the Signal Line (EMA of the MACD line).

Computes the Histogram (difference between MACD and Signal lines).

3. Visual Indicators
Zero Line: A white horizontal line at 0 for reference.

MACD Line: Plotted in green when above the signal line, red when below.

Signal Line: Displayed as a yellow line.

Histogram:

Green bars when MACD > Signal (bullish momentum).

Red bars when MACD < Signal (bearish momentum).

Background Highlights:

Light green on bullish crossovers (MACD crosses above Signal).

Light red on bearish crossunders (MACD crosses below Signal).

4. Alerts
Triggers when:

Bullish Crossover (MACD crosses above Signal).

Bearish Crossunder (MACD crosses below Signal).

🔹 How Traders Use This Indicator
Trend Identification:

MACD above zero → bullish trend.

MACD below zero → bearish trend.

Momentum Signals:

Bullish Crossover (Buy Signal): MACD crosses above Signal.

Bearish Crossunder (Sell Signal): MACD crosses below Signal.

Divergence (Not in this script, but useful):

Price makes higher highs, but MACD makes lower highs → Potential reversal.

🔹 Strengths of This Script
✅ Clean and Efficient Code – Uses Pine Script v6 best practices.
✅ Customizable Inputs – Adjust lengths and source price.
✅ Clear Visuals – Color-coded for easy interpretation.
✅ Built-in Alerts – For automated trading strategies.