MACD (Moving Average Convergence Divergence)

MACD is one of the most popular technical indicators. It shows the relationship between two EMAs and provides momentum, trend direction, and signal line crossover information.

Declaration

function init(ctx) {
  ctx.indicator('macd', 'MACD', { 
    fastPeriod: 12, 
    slowPeriod: 26, 
    signalPeriod: 9 
  });
}

Options

Option	Type	Default	Description
`fastPeriod`	`number`	12	Fast EMA period
`slowPeriod`	`number`	26	Slow EMA period
`signalPeriod`	`number`	9	Signal line EMA period

Output

Returns an object with three series, accessed via underscore naming:

Property	Description
`line`	MACD line (fast EMA - slow EMA)
`signal`	Signal line (EMA of MACD line)
`histogram`	Histogram (MACD line - signal line)

Accessing Values

function onBar(ctx, i) {
  const macdLine = ctx.ind.macd_line[i];
  const signal = ctx.ind.macd_signal[i];
  const histogram = ctx.ind.macd_histogram[i];
}

Use Cases

Signal Line Crossover

function onBar(ctx, i) {
  if (q.crossOver(ctx.ind.macd_line, ctx.ind.macd_signal, i)) {
    ctx.order.market('ASSET', 1, { signal: 'buy', reason: 'macd_cross_up' });
  }
  if (q.crossUnder(ctx.ind.macd_line, ctx.ind.macd_signal, i)) {
    ctx.order.close('ASSET', { signal: 'sell', reason: 'macd_cross_down' });
  }
}

Histogram Momentum

function onBar(ctx, i) {
  const hist = ctx.ind.macd_histogram[i];
  const prevHist = ctx.ind.macd_histogram[i - 1];
  
  // Rising histogram = increasing bullish momentum
  if (hist > 0 && hist > prevHist) {
    // Strong bullish momentum
  }
}

Calculation

MACD Line = EMA(fast) - EMA(slow)
Signal Line = EMA(MACD Line, signalPeriod)
Histogram = MACD Line - Signal Line

EMA - Underlying EMA calculations
PPO - Percentage-based momentum oscillator
RSI - Another popular momentum indicator