New edge proposed: volume_weighted_macd_divergence — E8 Intelligence Research

{ "name": "volume_weighted_macd_divergence", "source": "Martin Pring / Linda Raschke 2014 volume-weighted MACD divergence", "type": "entry_engine", "rule": "Enter short when price makes a higher high above prior swing high but the volume-weighted MACD histogram (12,26,9) makes a lower high, and the current bar closes below its 20-period moving average.", "pseudocode": "vwmacd = (EMA(close*volume,12)/EMA(volume,12)) - (EMA(close*volume,26)/EMA(volume,26)); signal = EMA(vwmacd,9); hist = vwmacd - signal; if (close > highest(close,20)[1] AND hist < hist[1] AND hist[1] < hist[2] AND close < SMA(close,20)) then enter_short();", "why_it_works": "Volume-weighted MACD filters out low-volume noise, so divergence signals true exhaustion of directional momentum before reversals." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com