Dual EMA Crossovers Confirmed by RSI with Fixed Exits

Summary

This trend-following system uses a short and long exponential moving average crossover to signal direction, with the Relative Strength Index as a confirmation filter. A long signal occurs when the short average crosses above the long average while RSI is above 50; a short signal requires a downward crossover and RSI below 50. The stated setup uses 9- and 21-period averages and a 14-period RSI. It pairs entries with fixed take-profit and stop-loss settings, described as 1.5% and 0.5%, respectively.

The document presents the rules and discusses possible refinements, including volatility-based exits, market-condition filters, and position sizing. It does not report backtest results, and the published test configuration uses daily data despite describing the strategy as a 5-minute system. The code also defines overbought and oversold RSI inputs that are not part of its entry conditions. Crossovers can whipsaw in sideways markets, while fixed exits may behave differently as volatility changes. Slippage and trading costs could also affect outcomes, particularly if the rules are applied at short intervals. The described benefits are hypotheses, not demonstrated performance.

Key ideas

• The system enters on dual EMA crossovers when RSI confirms direction relative to 50.
• The stated default indicator periods are 9 and 21 for the averages and 14 for RSI.
• Fixed profit and loss exits are specified, but no measured performance is reported.
• The published test timeframe conflicts with the document’s description of a 5-minute strategy.
• The overbought and oversold RSI inputs are defined but do not filter entries in the source.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.