MACD Momentum Entries Filtered by a Long-Term EMA
Summary
This two-direction strategy combines MACD crossovers with a long-term exponential moving average. Long entries require price above the EMA, a bullish MACD crossover, and a MACD reading below zero; short entries require price below the EMA, a bearish crossover, and a MACD reading above zero. The document describes default MACD lengths of 12, 26, and 9, with a 200-period EMA, and allows long-only, short-only, or two-sided operation.
Stops and profit targets are set as percentages of price, with the stated defaults establishing a 1:2 stop-to-target relationship. The article notes that sideways conditions may cause false signals, fixed percentages may fit volatility poorly, and frequent trading can accumulate fees. It proposes volatility, volume, market-condition, and time filters as possible refinements. Although the text recommends backtesting before live use, the published example covers only a short interval on an ETH market and reports no performance statistics, so it offers little evidence of robustness.
Key ideas
- The strategy combines MACD crossovers with price position relative to a long-term EMA.
- Long entries occur on bullish crossovers below the MACD zero line when price is above the EMA.
- Short entries occur on bearish crossovers above zero when price is below the EMA.
- Percentage-based stops and profit targets define a default 1:2 reward-to-risk relationship.
- Ranging markets, volatility shifts, and transaction costs can weaken results, and the example provides no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.