📊 Coloring Momentum: Comparing Standard MACD vs MACD 4C
Momentum indicators are a trader’s compass—but not all compasses are created equal. In this post, we compare the classic MACD with the visually enhanced MACD 4C, a four-color histogram tool that adds clarity and nuance to trend and momentum analysis.
Let’s break down how both tools work, how we use them at Xuantify, and how you can decide which one fits your strategy best.
🔍 What Are These Indicators?
Standard MACD (Moving Average Convergence Divergence) is a time-tested momentum indicator that plots the difference between two EMAs (typically 12 and 26) and a signal line (usually a 9 EMA of the MACD line). It’s simple, effective, and widely used.
MACD 4C, developed by vkno422, builds on the classic MACD by introducing a four-color histogram and divergence detection, making it easier to interpret momentum shifts and trend strength visually.
Key Differences:
🧠 How We Use Them at Xuantify
We use both indicators—but for different purposes.
1. Standard MACD – Clean Confirmation
We use it for classic trend confirmation and crossover signals. It’s great for traders who prefer minimalism and are comfortable interpreting line-based momentum.
2. MACD 4C – Visual Momentum Clarity
We use MACD 4C when we want a more intuitive, color-coded view of momentum. The four-color histogram helps us quickly spot trend strength, exhaustion, and divergence.
🧭 Color Coding in MACD 4C
MACD 4C uses four histogram colors (default settings):
This makes it easier to:
⚙️ Settings That Matter
Both indicators allow customization, but MACD 4C offers more visual tuning:
MACD 4C:
Standard MACD:
🔗 Best Combinations with These Indicators
We combine MACD tools with:
⚠️ What to Watch Out For
Both indicators are lagging by nature—they rely on moving averages. MACD 4C’s divergence detection can help anticipate reversals, but it’s still best used as a confirmation tool, not a standalone signal.
🔁 Repainting Behavior
Both the standard MACD and MACD 4C are non-repainting. Once a histogram bar or crossover is printed, it remains fixed. This makes them reliable for real-time trading and backtesting.
⏳ Lagging or Leading?
These are lagging indicators, designed to confirm trends—not predict them. MACD 4C’s divergence feature adds a leading element, but it should always be used with structure and price action for confirmation.
🚀 Final Thoughts
If you’re a visual trader who wants more clarity from your momentum tools, MACD 4C is a powerful upgrade. If you prefer simplicity and tradition, the standard MACD still holds its ground.
Try both, test them in your strategy, and see which one sharpens your edge.
Momentum indicators are a trader’s compass—but not all compasses are created equal. In this post, we compare the classic MACD with the visually enhanced MACD 4C, a four-color histogram tool that adds clarity and nuance to trend and momentum analysis.
Let’s break down how both tools work, how we use them at Xuantify, and how you can decide which one fits your strategy best.
🔍 What Are These Indicators?
Standard MACD (Moving Average Convergence Divergence) is a time-tested momentum indicator that plots the difference between two EMAs (typically 12 and 26) and a signal line (usually a 9 EMA of the MACD line). It’s simple, effective, and widely used.
MACD 4C, developed by vkno422, builds on the classic MACD by introducing a four-color histogram and divergence detection, making it easier to interpret momentum shifts and trend strength visually.
Key Differences:
- Standard MACD: Two lines + histogram (single color)
- MACD 4C: Histogram only, but with four colors to show trend strength and direction
- MACD 4C includes bullish/bearish divergence detection
🧠 How We Use Them at Xuantify
We use both indicators—but for different purposes.
1. Standard MACD – Clean Confirmation
We use it for classic trend confirmation and crossover signals. It’s great for traders who prefer minimalism and are comfortable interpreting line-based momentum.
2. MACD 4C – Visual Momentum Clarity
We use MACD 4C when we want a more intuitive, color-coded view of momentum. The four-color histogram helps us quickly spot trend strength, exhaustion, and divergence.
🧭 Color Coding in MACD 4C
MACD 4C uses four histogram colors (default settings):
- Lime/Green: Bullish momentum building or continuing
- Red/Maroon: Bearish momentum building or continuing
This makes it easier to:
- Spot momentum shifts
- Identify trend continuation
- Detect divergence at a glance
⚙️ Settings That Matter
Both indicators allow customization, but MACD 4C offers more visual tuning:
MACD 4C:
- Adjustable fast/slow MA and signal smoothing
- Toggle divergence detection
- Color-coded histogram for quick reads
Standard MACD:
- Clean, minimal, and widely supported
- Best for traders who prefer traditional setups
🔗 Best Combinations with These Indicators
We combine MACD tools with:
- Structure Tools – BOS/CHOCH for context
- Liquidity Zones – To spot where momentum may reverse
- Volume Profile – To confirm strength behind moves
- Fair Value Gaps (FVGs) – For precision entries
⚠️ What to Watch Out For
Both indicators are lagging by nature—they rely on moving averages. MACD 4C’s divergence detection can help anticipate reversals, but it’s still best used as a confirmation tool, not a standalone signal.
🔁 Repainting Behavior
Both the standard MACD and MACD 4C are non-repainting. Once a histogram bar or crossover is printed, it remains fixed. This makes them reliable for real-time trading and backtesting.
⏳ Lagging or Leading?
These are lagging indicators, designed to confirm trends—not predict them. MACD 4C’s divergence feature adds a leading element, but it should always be used with structure and price action for confirmation.
🚀 Final Thoughts
If you’re a visual trader who wants more clarity from your momentum tools, MACD 4C is a powerful upgrade. If you prefer simplicity and tradition, the standard MACD still holds its ground.
Try both, test them in your strategy, and see which one sharpens your edge.
Precision-driven insights for serious and casual traders. Xuantify combines proven indicators with custom enhancements to deliver clarity, confidence and an edge in any market. Blending simplicity with smart, strategic design.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Precision-driven insights for serious and casual traders. Xuantify combines proven indicators with custom enhancements to deliver clarity, confidence and an edge in any market. Blending simplicity with smart, strategic design.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.