SPY Hourly EMA Reversal Strategy with RSI and MACD Filters

Summary

This SPY strategy seeks short-term reversals from hourly price moves. It enters long when a fast EMA crosses above a slower EMA while RSI is above 50. It exits on a bearish EMA relationship combined with MACD falling below its signal line and a stochastic reading above 60. The script also permits a short entry after a long trade ends if a recent stochastic reading was above 80.

Risk controls use percentage-based stops and targets, with a partial exit after price reaches twice the target distance; the remaining position then receives revised stop and target levels. The source comments report average holding periods of roughly five to six trading days over the prior six years, but provide no performance statistics or detailed test methodology. The description warns that hourly signals can be false, costs can accumulate with frequent trading, and parameter tuning may overfit. It also advises recalibrating settings for other instruments.

Key ideas

• A long entry requires a fast EMA crossover above the slow EMA and RSI above 50.
• Long exits combine bearish EMA positioning, a MACD signal crossover, and a stochastic condition.
• The strategy uses configurable percentage stops and targets and scales out part of a position after an extended move.
• Short trades may follow a completed long trade when a recent stochastic reading is elevated.
• The document reports typical holding duration but gives no detailed performance evidence, and flags costs and overfitting risks.

Tags

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