EMA and MACD Crossover Entries with Recent-Range Stops

Summary

This trend-following system requires two events in the same direction: price crosses EMA 9 and the MACD line crosses its signal line. Long entries use an upward crossover; short entries use a downward crossover. Stops are placed at the recent low for longs or recent high for shorts, using a configurable lookback, and the take-profit distance is set as a multiple of the entry-to-stop risk. The published settings use a five-candle lookback and a 3.5 risk multiple.

The document identifies sideways-market whipsaws, slippage, parameter sensitivity, and dependence on clear trends as risks. It supplies backtest configuration but no performance statistics. The source also notes that average entry price may not be available when exits are first calculated, which can affect stop and target placement. Although explanatory comments mention a different target multiple, the configurable input and strategy description specify 3.5; results would need independent verification before drawing conclusions.

Key ideas

• Long and short entries require matching price-versus-EMA and MACD crossovers.
• Stops are placed at the recent lookback low for longs and high for shorts.
• The target distance is defined as a multiple of the stop distance.
• Choppy conditions can produce repeated false signals, while fast markets can cause slippage.
• The supplied material gives no backtest performance results and flags entry-price timing as an implementation limitation.

Tags

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