Purpose of the MACD
The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of price. It helps traders identify potential trend direction, momentum shifts, and entry/exit points.
How It Works
When you select MACD in the Trade Rule block, you can configure it with the following settings:
Fast EMA Period of MACD
The number of candles used for the fast-moving average.
Reacts quickly to price changes and is more sensitive to short-term movements.
Slow EMA Period of MACD
The number of candles used for the slow-moving average.
Reacts more slowly, filtering out short-term noise.
Signal Period of MACD
The number of candles used to calculate the signal line (a moving average of the MACD line).
Often used to generate buy/sell signals when crossed by the MACD line.
Applied Price of MACD (Source for calculation)
Close Price – Candle closing price.
Open Price – Candle opening price.
High Price – Candle highest point.
Low Price – Candle lowest point.
Median Price – (High + Low) ÷ 2
Typical Price – (High + Low + Close) ÷ 3
Weighted Price – (High + Low + Open + Close) ÷ 4
MACD Mode
Main Line – The difference between the Fast EMA and Slow EMA.
Signal Line – A moving average of the Main Line, used for crossovers.
Time Frame of MACD
Select the chart time frame for MACD calculation.
Can be replaced with a variable or input for faster backtesting and easy adjustments.
Candle ID of MACD
0 – Current forming candle.
1 – Most recently closed candle.
Higher IDs = older candles.
Adjust of MACD (Modify Output)
Add, subtract, multiply, or divide the calculated value by a chosen number.
Example
If you set:
Fast EMA Period: 12
Slow EMA Period: 26
Signal Period: 9
MACD Mode: Main Line
Candle ID: 1
You get the MACD main line value for the most recently closed candle, based on the difference between the 12-period and 26-period EMAs.
Use Cases
Detect trend direction and momentum shifts.
Use MACD line crossovers with the Signal line for potential entries/exits.
Combine with other indicators for confirmation.
⚠ Tip: MACD can lag in volatile markets — consider combining it with faster indicators for timely entries.