The MACD BB Lines indicator is built from a standard MACD indicator with Bollinger Bands added to the signal line. The MACD values are shown as dots. The indicator is typically used to generate with-trend entries on a breakthrough of the upper / lower Bollinger Bands.
Indicator Description
One may use the MACD BB Lines to locate trend entries from breakthroughs of the upper / lower Bollinger Bands. The Library MACD BB Lines NinjaTrader 8 indicator plots minor and major trends:
- Minor Trend: The minor lower timeframe trend is up when the MACD is rising. It is down when the MACD is falling.
- Major trend: The higher timeframe trend may be taken from the MACD itself. An major uptrend is signaled when MACD > 0, while MACD < 0 stands for a major downtrend.
Our NinjaTrader MACD BB Lines indicator comes with a few public Series<double> that can be accessed via other indicators or automated strategies. These will also shown in the strategy builder.
One may use the “Trend” dataseries to detect the minor trend. “Trend” will show the value +2 when the MACD is rising and above the upper Bollinger Band. A +1 trend occurs when the MACD rising but below the upper Bollinger Band. Conversely a -1 will plot when the MACD falling and above the lower Bollinger Band. A -2 trend occurs when the MACD it is falling and below the lower Bollinger Band.
You will further find two Series<double> “LongSignal” and “ShortSignal”. A +2 long signal will signal upper band breakthroughs in major uptrends (strong). A +1 long signal will signal upper band breakthroughs in major downtrends (weak). The value “0” indicates “no signal”.
Conversely, a short signal will return +2 for a lower band breakthroughs in a major downtrends (strong). A short signal will return +1 for lower band breakthroughs in a major uptrends (weak). Again, value “0” indicates “no signal”.
MACD BB Lines Market Analyzer Column:
The MACD BB Lines NinjaTrader 8 indicator also comes with two separate market analyzer columns. The first column will simply indicate the trend and return values based on rising and falling MACD above or below the Bollinger Bands as described above.
The second column will return entry signals, where +2 stand for a strong long signal, + 1 for a weak long signal, 0, for no signal, -1 for a weak short signal and – 2 for a strong short signal. Long and short signals are called from a single column, due to the limited space available in the market analyzer itself. For the Series<double> objects, LongSignal and ShortSignal series have been separated, as they are designed to return positive values or 0 for no signal only. Please be mindful of this distinction.
MACD BB Lines Paint Bars:
The indicator comes with paint bars that reflect the minor trend. The colors are similar to the colors for the MACDBB dots, but you may differentiate between upcloses and downcloses.
MACD BB Lines Sound Alerts:
The MACD BB Lines NinjaTrader 8 indicator comes with sound alerts that will be triggered on a breakthrough of the upper / lower bands, or when the major trend changes occur.
Other Library Indicators
The indicator is best used when aligned with a higher timeframe trend bias and Volume / Range Analysis. Please review our Indicator Spotlights on the Regression Channel and the Donchian Channel for information on determining trends. The indicator library has a Channel Indicators category, featuring among others Regression Channel, a Daily Regression Channel as well as the Donchian Channel. Range / Volume Analysis was discussed in our Indicator Spotlights on the Relative Ranges and Relative Volume indicators. Finally, other library versions of the MACD indicator include the MACD KC Lines, the Multiple MACD and the Gapless MACD.
Our Indicator Spotlight has also reviewed other indicators from our Channel Indicators category, namely the Regression Channel and the Squeeze indicator (the dizygotic twin of the Squeeze Channel indicator). Finally, the Ichimoku Kinko Hyo, also discussed in our Indicator Spotlight, has certain similarities with the MACD.
Finally, in our Indicator Spotlight on the Z-score we discussed how to create a fixed scale for the Awesome Oscillator. Specifically, the post discussed how the Z-score can be used to create a fixed scale for an Awesome Oscillator strategy. The same can be achieved with the MACD and is particularly useful if you want to create testable entry and exit conditions for trading systems.
The indicator is available for NinjaTrader 8.
