EMA Crossover Trend Signals Filtered by RSI and MACD

Summary

This trend-following strategy combines a short and long EMA crossover with RSI and MACD confirmation. The stated defaults use 9- and 21-period EMAs, a 14-period RSI, and standard MACD settings. A long entry follows an upward EMA cross when RSI is below the overbought threshold and MACD is above its signal line; a short entry uses the downward cross, RSI above the oversold threshold, and bearish MACD alignment. Exits are set at fixed percentage distances from the average entry price, and position size is expressed as a percentage of equity.

The document discusses intraday use, but the published backtest configuration uses a two-day period and does not include performance statistics. Its claims of signal quality are therefore not demonstrated by the material provided. The text identifies delayed signals, false trades in ranging markets, volatility-sensitive fixed exits, and commission costs as concerns. It suggests testing parameter changes and adding market-state filters, volume checks, and time-based exits; these proposals would also need validation.

Key ideas

• EMA crossovers establish the direction of a potential trade, while RSI and MACD act as confirmation filters.
• Long and short entries use opposite crossover and MACD conditions with RSI thresholds.
• Exits use fixed percentage stop-loss and take-profit levels relative to average entry price.
• The strategy may lag, struggle in sideways markets, and be sensitive to trading costs and volatility.
• The published configuration lacks performance results and uses a timeframe that differs from the stated intraday focus.

Tags

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