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Stochastic Oscillator on MACD

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MACD Calculation:

First, calculate the MACD line:
MACD = EMA(fast) - EMA(slow)

Common default: EMA(12) - EMA(26)

Stochastic Applied to MACD:

Use the standard stochastic formula, but instead of using price, apply it to the MACD line:


📈 Interpretation:
%K crossing above 20 → possible bullish signal (MACD is turning upward from recent lows).

%K crossing below 80 → possible bearish signal (MACD is turning downward from recent highs).

Divergence: When price makes a new high/low but the stochastic MACD doesn’t, it can suggest a reversal.

✅ Advantages:
Combines trend-following (MACD) and momentum (Stochastic) analysis.

Useful for detecting MACD momentum shifts earlier than MACD crossovers alone.

Would you like a Pine Script implementation of the Stochastic MACD?

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