MACD Oscillator

The MACD oscillator converts the two lines of the MACD into a single line that fluctuates above and below zero. The MACD oscillator is calculated by subtracting the signal line value from the MACD line value. When the MACD line crosses the signal line, a buy or sell signal is generated. The signals provided by the MACD or the MACD oscillator are identical. The choice of one over the other is simply a matter of user preference.

For more information on the formula used to calculate the MACD oscillator, see Moving Average Convergence Divergence (MACD).

Parameters

Parameter

Function

Avg. Type

Sets the type of calculation for the for Average 1, Average 2 and the Signal Line:

Option	Function
Exponential	Exponential moving average.
Hamming	Hamming moving average.
Modified	Modified moving average.
Simple	Simple moving average.
Weighted	Weighted moving average.

Color

Default color for the MACD Line is green. Default color for the Signal Line is yellow. To change the color, click on the color button:

Then choose the color you want from the Color Menu.

Graph

Sets the drawing method for the study.

Option	Function
Bars	Renders the study as bars.
Dots	Renders the study as dots.
Dotted	Renders the study as dots.
Histogram	Renders the study as a histogram drawn from 0.
Line (Default)	Renders the study as a line.
Not Drawn	The study is not rendered.

Line Style

Sets the rendering technique of the graph parameter (if it is set to Line).

Option	Function
Dash-Dot	--l-l-l-l-l-l-
Dash-Dot-Dot	----ll----ll----
Dashed	- - - - - - - - - - - - - - -
Dotted	llllllllll
Solid (Default)	-------------------------

Line Width

Sets the tickness of the study line.

Option	Function
1 pixel (Default)
2 pixels
3 pixels
4 pixels
5 pixels

Period

Default for Avg. 1 is 0.1

Default for Avg. 2 is 0.2

Default for Avg. 3 is 0.3

Price

The price on which Average 1 and 2 are calculated:

Option	Function
Close	Closing price (Default for Average 1 and 2).
First Study	Calculates the study using the values of the first study in the window.
H, L Midpt	Calculates the study on the mid-point of the high and low.
H, L, C Avg.	Calculates the study on the average of the High, Low, and Close.
High	High price.
Low	Low price.
Open	Opening price.
Tick Average	Calculates the study on the average of ticks in the period.

Notes

See, notes on the MACD.

see, Appel, Gerald, The Moving Average Convergence-Divergence Trading Method, New York: Signalert Corporation.