The MACD 4C indicator: how it reads momentum

The cornerstone of our method is the MACD 4C indicator. The classic MACD measures the difference between two exponential moving averages (12 and 26) to express the momentum of the move: is price accelerating or slowing down? The 4C version draws the MACD line itself as bars in four colours: two above zero (rising momentum expanding or fading) and two below it (falling momentum expanding or fading). Because the bars are the MACD line itself, a colour change from green to red means exactly a zero-line crossing, that is, the two averages crossing. We use it with its default settings.

What do we read from it?

We do not use the indicator to give a direct buy or sell signal, but to read the state of momentum behind the wave: