MACD-V Indicator

Suppose the EMA difference is 2 price units and ATR is 4. MACD-V is 100 × 2 / 4 = 50. With the same difference and ATR of 8, it becomes 25. For a difference of −2, the corresponding values are −50 and −25. These are hypothetical inputs, not market observations.

For a positive denominator, the sign matches standard MACD, so their line zero crosses coincide wherever both current and previous values are available. The signal-line crossings need not coincide: an EMA of the normalized sequence is generally different from dividing the standard MACD signal by the current ATR.

Standard MACD is an absolute price difference. A one dollar EMA gap has a different meaning for a 20 dollar stock and a 500 dollar stock. MACD-V scales that difference by ATR, which gives the result a volatility reference.

The normalized value can be compared more directly across markets, but the denominator creates a new dependency. A larger positive ATR reduces the absolute magnitude of MACD-V toward zero when the EMA gap is unchanged. That behavior should be part of the test, not treated as an error.

The published MACD-V framework groups values into momentum stages. Those stages can help describe whether momentum is rallying, ranging, retracing, or reversing. They do not state the next return.

A threshold strategy must define the direction of the cross, the signal-line state, the entry bar, and the exit. Without those details, a chart label cannot be reproduced in Pine Script or audited in a backtest.

Normalization is useful when the research question spans assets. Apply the same rule to SPY, QQQ, NVDA, and BTCUSD, then compare trade count, drawdown, average trade, and stability across time.

Do not choose different thresholds after seeing each chart. That removes the main benefit of a common scale and increases the risk of fitting each symbol separately.