Updated description: This custom indicator is a modified version of the Moving Average Convergence Divergence (MACD) oscillator, which is a trend-following momentum indicator used to identify changes in a security's strength, direction, momentum, and duration of a trend. The MACD oscillator calculates the difference between two exponential moving averages (EMAs) of different lengths and presents it as a line that oscillates above and below the zero line, indicating overbought and oversold conditions. This indicator includes some modifications, such as a simple moving average (SMA) line that crosses with the EMAs and highlights bearish and bullish signals with dots and shapes, respectively.
The indicator is best suited for markets that trend well, such as Forex or cryptocurrency markets. It can be used to identify potential entry and exit points for trades based on changes in bullish or bearish momentum. When the MACD crosses the SMA from below, it may indicate a buy signal, while a cross from above may indicate a sell signal.
To use this indicator, traders may look for crossovers between the SMA and EMAs, as well as bullish or bearish signals indicated by the dots and shapes. However, it is important to note that no indicator is foolproof and should always be used in conjunction with other forms of analysis and risk management techniques, such as stop-loss orders.
**Plots made editable (Step is adjustable, by a larger number, in the Style menu)