MACD and EMA Trend Signals with SMA-Based Exits

Summary

This strategy combines MACD crossovers with an 18-period exponential moving average (EMA) to generate directional entries. It opens a long position when MACD crosses above its signal line while price is above the EMA, and a short position when MACD crosses below while price is below. The strategy allows only one position at a time.

Exits use either a reverse MACD crossover or a close beyond a 10-period simple moving average of lows for longs, and of highs for shorts. The document describes the rules and suggests the approach is intended for trending conditions, while warning that sideways markets can produce false signals. It supplies no backtest results or measured performance, so its effectiveness across markets and timeframes is not established.

Key ideas

• MACD crossovers trigger entries only when price is on the corresponding side of the 18-period EMA.
• The strategy restricts itself to one open position at a time.
• Long trades exit below the 10-period low average or on a bearish MACD crossover.
• Short trades exit above the 10-period high average or on a bullish MACD crossover.
• The stated limitation is that sideways markets may generate false signals.

Tags

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