BB Macd is a derivative of MACD and Bollinger Band (BB). Technically it is a MACD fitted with a band calculated similar as BB. The basic structure of BB Macd is similar to the normal/traditional MACD indicator.
The green dot of BB Macd signify that the current value of MACD is higher than the previous period, and vice versa which is shown by the red dot that showed the current value of MACD is lower than the previous period.
The different is that BB Macd does not have the signal line but it has two bands that lurking around the Macd value.
This indicator is quite recent where more practices is required to become proficient.
From the information I have read, some of the rules or guidelines in interpreting the BB Macd are;
1. In an uptrend with green dots moving upward when a red dot appeared and move below the top band it is similar to the downward cross (negative cross) for traditional Macd indicator i.e. Macd bar falls below the signal line, a bearish sign. Conversely, in a downtrend with red dots on the downward move when a green dot appear and crossover the bottom band it is an upward cross or positive cross for traditional Macd indicator i.e. Macd is above the signal line.
2. When the green dots cross the upper band, the trend is up and vice versa when the red dots cross the lower band.
3. If the dots is slowing and the bands are coming together, trend is weakening.
-In a strong move especially after consolidation, the dots are moving rapidly with little pullback.
-The distance between the bands can identify the strength of the trend. The larger the gap between the bands, the more momentum is the move.
4. If the MACD dots move outside the bands, the market has lot of momentum.
5. At key area such S&R, BB Macd showed a strong reaction. On the chart , the blue triangle is an area where there is a resistance level of previous high and round number 99.0. The dots cross from the top of the band to the below the opposite band.
6. A zero line rejection occurs when the Macd BB touch the zero line and bounce, prices is expected to act similarly. Refer to red arrow at blue rectangle and red arrow at the BB Macd.
7. Divergence in BB Macd is treated in similarly as in traditional Macd.
