Description:
Have you ever found yourself searching for the perfect indicator that paints bars based on Alexander Elder's impulse system? I know I have! After digging around online, I stumbled upon a couple of options, but they just didn’t cut it. One of the closest indicators I found can be found here. However, that one colors bars based on the MACD line and its signal line, while Elder’s method suggests coloring bars based on the price moving average and the MACD oscillator.
After some thought, I decided to create my own indicator that would meet my needs perfectly. The result? A unique blend of MACD, the MACD histogram, and an impulse system. Here’s how it works:
- The histogram bar turns green when both the histogram and the price moving average are rising simultaneously.
- The histogram bar turns red when both the histogram and the price moving average are falling simultaneously.
- The histogram bar turns blue when the histogram and the price moving average are moving in opposite directions.
Alexander Elder refers to this system as a censorship system: when the bar is green, selling is off-limits; when it’s red, buying is a no-go; and when it’s blue, the restrictions are lifted.
Here are the parameters for the indicator:
- FastEMA, SlowEMA, SignalEMA: These are the MACD parameters.
- MAPeriod: This is the period for the simple moving average based on price.
- MAMode: This defines the method for calculating the moving average: 0 for SMA and 1 for EMA.
In the standard MACD indicator provided by MetaTrader, the signal line is calculated using SMA, but in my version, I’ve opted for EMA, just as the original MACD creator recommended.
Image:
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