MACD% Indicator

#MACD #percentage #momentum #trend 

MACD% takes the familiar MACD concept and expresses it as a percentage of price instead of absolute points. Regular MACD tells you the gap between two moving averages in rupees or dollars. MACD% tells you that same gap as a percentage — so you can compare momentum across stocks at different price levels on the same scale. 

Default parameters: Same as standard MACD (Shorter Ave, Longer Ave, Signal Line) 

How to read it: 

Exactly like regular MACD — a line, a signal line, and histogram bars — but the scale is percentage-based. Above zero means short-term momentum is ahead of long-term momentum. Below zero means the opposite. The signal line crossover gives you timing. The histogram shows whether the gap is widening or narrowing. 

Useful readings: 

– MACD% above zero — bullish momentum zone. Short-term trend is stronger than long-term. 

– MACD% below zero — bearish momentum zone. Long-term trend is stronger than short-term. 

– MACD% crosses above signal line — momentum is turning bullish. 

– MACD% crosses below signal line — momentum is turning bearish. 

– Histogram bars growing — the momentum gap is widening. The trend is strengthening. 

– Histogram bars shrinking — the momentum gap is narrowing. The trend is weakening. 

– Divergence from price — price makes a new high but MACD% doesn’t — momentum is fading. 

Use cases: 

– Cross-stock comparison: This is the killer feature. A ₹500 stock and a ₹5,000 stock can be compared on the same MACD% scale. Regular MACD can’t do that because the point values are different. 

– Standard MACD plays: All the usual MACD strategies work — crossovers, divergence, histogram flips — just on a normalized percentage scale. 

– Portfolio screening: Screen for stocks where MACD% just crossed above the signal line. You’re getting momentum signals that are comparable across your entire watchlist. 

– Multi-timeframe confirmation: Check MACD% on daily, weekly, and hourly charts. When all three align, the signal is stronger. 

Objective rules: 

– Same as standard MACD: go long on MACD% crossing above signal line, go short on crossing below. 

– Exit when the cross reverses. 

– Use histogram flips (positive to negative or vice versa) as early warning signals. 

– Avoid trading when MACD% is flat near zero with tiny histogram bars — momentum is dead. 

What makes it unique: Regular MACD is great for one stock, but you can’t compare a ₹100 stock’s MACD reading with a ₹10,000 stock’s reading. MACD% solves that by expressing everything as a percentage of price. Suddenly, your entire portfolio speaks the same momentum language. 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.