Rate of Change Histogram

Explanation of Modifications
Converting ROC to Histogram:
Original ROC: The ROC is calculated as roc = 100 * (source - source[length]) / source[length], plotted as a line oscillating around zero.

Modification: Instead of plotting roc as a line, it’s now plotted as a histogram using style=plot.style_columns. This makes the ROC values visually resemble the MACD histogram, with bars extending above or below the zero line based on momentum.

Applying MACD’s Four-Color Scheme:
Logic: The histogram’s color is determined by:
Above Zero (roc >= 0): Bright green (#26A69A) if ROC is rising (roc > roc[1]), light green (#B2DFDB) if falling (roc < roc[1]).

Below Zero (roc < 0): Bright red (#FF5252) if ROC is falling (roc < roc[1]), light red (#FFCDD2) if rising (roc > roc[1]).

Implementation: Used the exact color logic and hex codes from the MACD code, applied to the ROC histogram. This highlights momentum ebbs (falling ROC, fading waves) and flows (rising ROC, strengthening waves).

Removing Signal Line:
Unlike the previous attempt, no signal line is added. The histogram is purely the ROC value, ensuring it directly reflects price change momentum without additional smoothing, making it faster and more responsive to pulse waves, as you indicated ROC performs better than other oscillators.

Alert Conditions:
Added alerts to match the MACD’s logic, triggering when the ROC histogram crosses the zero line:
Rising to Falling: When roc[1] >= 0 and roc < 0, signaling a potential wave peak (e.g., end of Wave 3 or C).

Falling to Rising: When roc[1] <= 0 and roc > 0, indicating a potential wave bottom (e.g., start of Wave 1 or rebound).

These alerts help identify transitions in 3-4 wave pulse patterns.

Plotting:
Histogram: Plotted as columns (plot.style_columns) with the four-color scheme, directly representing ROC momentum.

Zero Line: Kept the gray zero line (#787B86) for reference, consistent with the MACD.

Removed ROC Line/Signal Line: Since you want the ROC to act as the histogram itself, no additional lines are plotted.

Inputs:
Retained the original length (default 9) and source (default close) inputs for consistency.

Removed signal-related inputs (e.g., signal_length, sma_signal) as they’re not needed for a pure ROC histogram.

How This ROC Histogram Works for Wave Pulses
Wave Alignment:
Above Zero (Bullish Momentum): Positive ROC bars indicate flows (e.g., impulse Waves 1, 3, or rebounds in Wave B/C). Bright green bars show accelerating momentum (strong pulses), while light green bars suggest fading momentum (potential wave tops).

Below Zero (Bearish Momentum): Negative ROC bars indicate ebbs (e.g., corrective Waves 2, 4, A, or C). Bright red bars show increasing bearish momentum (strong pullbacks), while light red bars suggest slowing declines (potential wave bottoms).

3-4 Wave Pulses:
In a 3-wave A-B-C correction: Wave A (down) shows bright red bars (falling ROC), Wave B (up) shows bright/light green bars (rising ROC), and Wave C (down) shifts back to red bars.

In a 4-wave consolidation: Alternating green/red bars highlight the rhythmic ebbs and flows as momentum oscillates.

Timing:
Zero-line crossovers mark wave transitions (e.g., from Wave 2 to Wave 3).

Color changes (e.g., bright to light green) signal momentum shifts within waves, helping identify pulse peaks/troughs.

Advantages Over MACD:
The ROC histogram is more responsive than the MACD histogram because ROC directly measures price change percentage, while MACD relies on moving average differences, which introduce lag. This makes the ROC histogram better for capturing rapid 3-4 wave pulses, as you noted.

Example Usage
For a stock with 3-4 wave pulses on a 5-minute chart:
Wave 1 (Flow): ROC rises above zero, histogram turns bright green (rising momentum), indicating a strong bullish pulse.

Wave 2 (Ebb): ROC falls below zero, histogram shifts to bright red (falling momentum), signaling a corrective pullback.

Wave 3 (Flow): ROC crosses back above zero, histogram becomes bright green again, confirming a powerful pulse.

Wave 4 (Ebb): ROC dips slightly, histogram turns light green (falling momentum above zero) or light red (rising momentum below zero), indicating consolidation.

Alerts trigger on zero-line crosses (e.g., from Wave 2 to Wave 3), helping time trades.

Settings Recommendations
Default (length=9): Works well for most time frames, balancing sensitivity and smoothness.

Intraday Pulses: Use length=5 or length=7 for faster signals on 5-minute or 15-minute charts.

Daily Charts: Try length=12 or length=14 for broader wave cycles.

Testing: Apply to a stock with clear wave patterns (e.g., tech stocks like AAPL or TSLA) and adjust length to match the pulse frequency you observe.

Notes
Confirmation: Pair the ROC histogram with price action (e.g., Fibonacci retracements, support/resistance) to validate wave counts, as momentum oscillators can be noisy in choppy markets.

Divergences: Watch for divergences (e.g., price makes a higher high, but ROC histogram bars are lower) to spot wave reversals, especially at Wave 3 or C ends.

Comparison to MACD: The ROC histogram is faster and more direct, making it ideal for short-term pulse waves, but it may be more volatile, so use with technical levels for precision.