MACD Price Threshold Line Indicator

[rippleman]

Would anyone be able to create a script to plot the "MACD Price Threshold Line" as described in the following video?

Had to watch it a couple of times to understand it, but it seems it could be valuable. The reason of this is due to the predictive nature, as opposed to many of the lagging indicators that we typically deal with. Description from YouTube:

For MACD traders it is like turning on the lights on your car. The exactly when to enter a trade using the MACD line. You will be able to place your order on the day the MACD line is pointed down and be in the trade the first day the MACD has turned up. There is no need to wait for the MACD signal line to be crossed. This is too late to enter the trade. For W Bottom traders this will show you how to enter the trade before the W is complete.

The gist of the formula is that the "MACD Price Threshold" = "the closing price that would have to occur if the MACD line were to remain completely flat."

 

[halcyonguy]

please edit your post, to make it easier for others to help you.
...write a description of the formula(s) and at what time in the video they are mentioned.
...mention any ideas or changes you have

 

[johncw]

What you want is already on TOS.

Plot PMACDeq on price chart with https://tlc.thinkorswim.com/center/...rs/studies-library/R-S/ReverseEngineeringMACD
or if you prefer values on MACD indicator see https://tlc.thinkorswim.com/center/reference/Tech-Indicators/studies-library/M-N/MACDWithPrices.html

 

[rippleman]

What you want is already on TOS.

Plot PMACDeq on price chart with https://tlc.thinkorswim.com/center/...rs/studies-library/R-S/ReverseEngineeringMACD
or if you prefer values on MACD indicator see https://tlc.thinkorswim.com/center/reference/Tech-Indicators/studies-library/M-N/MACDWithPrices.html

Nice. Thanks so much - will take a look. Always helps to ask the expoerts!

 

[rippleman]

Nice. Thanks so much - will take a look. Always helps to ask the expoerts!

Hate to bother you, but how do you show the reverse-engineered MACD line in the future? In other words,

Nice. Thanks so much - will take a look. Always helps to ask the expoerts!

Quick question. How do I get the study to plot into the future? Technically it should be able to forecast a number of bars used to the "fast EMA" portion of the MACD (e.g. 12). I have my chart set up with an expansion area of 10 bars (via chart settings), but the study stops at the last candle.

 

[johncw]

I am no expert.

I don't have access to TOS. Maybe someone else can help you with the plotting issue.

As for your second question, maybe it is better to list what the lines mean.

Below is a daily chart of AAPL with PMACDeq, PMACDzero, and PMACDsignal lines. The lines are always plotted 1 (daily in this case) bar in the future as they show the threshold price for (PMACDeq) MACD to change in value, (PMACDzero) MACD to cross the zero line, and (PMACDsignal) MACD to cross the signal line. The TOS study should be doing the same things.

The video that you mention is showing PMACDeq which is represented by the green line in the chart below. When price closes above it, the MACD value is increasing compare to the previous close.

If you look at the price chart, when price closes are above the blue line (PMACDzero), MACD is above zero. When price closes are below the blueline. MACD is below zero.

As for the PMACDsignal, the orange line is the threshold price where MACD crosses the signal line.

https://imgur.com/a/Hr7h9dA

 

[rippleman]

I am no expert.

I don't have access to TOS. Maybe someone else can help you with the plotting issue.

As for your second question, maybe it is better to list what the lines mean.

Below is a daily chart of AAPL with PMACDeq, PMACDzero, and PMACDsignal lines. The lines are always plotted 1 (daily in this case) bar in the future as they show the threshold price for (PMACDeq) MACD to change in value, (PMACDzero) MACD to cross the zero line, and (PMACDsignal) MACD to cross the signal line. The TOS study should be doing the same things.

The video that you mention is showing PMACDeq which is represented by the green line in the chart below. When price closes above it, the MACD value is increasing compare to the previous close.

If you look at the price chart, when price closes are above the blue line (PMACDzero), MACD is above zero. When price closes are below the blueline. MACD is below zero.

As for the PMACDsignal, the orange line is the threshold price where MACD crosses the signal line.

https://imgur.com/a/Hr7h9dA

Will investigate further - thanks for taking the time out to assist me. Have also created a model to plot these three lines in Excel which I am using to identify other elements of bullish divergence as well as Fibonacci retracements.

 

[westonsloan]

@rippleman @johncw @halcyonguy

Hey guys, this is how I managed to set it up with my platform on TOS -- I have regular MACD on other screens with 30/1HR timeframe for longer range view of trend wave.

I use reverse engineered MACD on 5 MIN to show support. What I changed is the PMAC level to show me a boolean plot (point @ close) on lower study so that I can then compare that bar's close to my 1d333t entry timeframe. The blue line crossing above the tan line is bullish. When they are both crossed above the orange line you have the most bullish setup. As with my other indicators for confirmation of course because you can never rely on just one. Nonetheless, this is how you can get the essence of what you were asking @rippleman Play around with it a bit and you will see how helpful it can be for entries.