I have what I consider a pretty simple request. I very much like using momentum as an entry confirmation indicator, but my current weapon of choice (MACD) takes up far too much space on the chart. I don't use the histogram at all and I'm only interested in determining whether the difference between two moving averages is increasing or decreasing or in other words, momentum.
So basically what I need is an indicator that measures the difference between two moving averages (exponential in my case) and colors the bars either green (when the difference between them is growing) or red (when the difference between them is decreasing). No histogram needed!
---
I have attached below a chart with nxMACD, which is a colored version of MACD. It is set to show green bars when the difference between EMA 5 and EMA 10 is growing and red when the difference between them is shrinking. I'm only using the MACD because it allows me to see the see the change in momentum. You will notice that I don't make use of the third variable (signal SMA) at all and I'm not interested in that.
I have already thought of a name for this indicator as well - MAD - moving average difference.
So basically what I need is an indicator that measures the difference between two moving averages (exponential in my case) and colors the bars either green (when the difference between them is growing) or red (when the difference between them is decreasing). No histogram needed!
---
I have attached below a chart with nxMACD, which is a colored version of MACD. It is set to show green bars when the difference between EMA 5 and EMA 10 is growing and red when the difference between them is shrinking. I'm only using the MACD because it allows me to see the see the change in momentum. You will notice that I don't make use of the third variable (signal SMA) at all and I'm not interested in that.
I have already thought of a name for this indicator as well - MAD - moving average difference.
If you don't risk, you don't ever have to lose.