Crypto Trading Strategy of the Week
Fast EMA above Slow EMA with MACD — Strategy of the Week
This week our strategy will utilize some more of the new technical indicators we have just integrated. These are the MACD and exponential moving averages or EMAs. This strategy will make use of one of the pre-designed MACD templates on Coinrule. This means it will be extremely easy to set up and start trading with the strategy.
Another important thing to know is that with this template, we also have an associated script on TradingView. This means that you’ll be able to back-test the strategy on any coin and timeframe you choose
More on that layer. The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a coin’s price. The MACD is calculated by subtracting the 26-period exponential moving average from the 12-period EMA. The result of that calculation is the MACD line. A nine-day EMA of the MACD called the signal line is then plotted on top of the MACD line. This can then function as a trigger for buy and sell signals. Traders may buy a coin when the MACD crosses above its signal line and sell or short the coin. When the MACD crosses below its signal line. EMAS are a moving average type that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average, which applies an equal weight to all observations in the period.
To enter trades:
This strategy has two entry conditions. The first is when the MACD histogram turns bullish, i.e., this is when the MACD crosses above its signal line. This is typically a buy signal.
And then the second entry condition relies on EMA8 being greater than EMA24 Just like this.
The exit conditions utilize trailing take profits and stop losses. Essentially the take profit and stop loss will adapt to price trend strength as illustrated in this diagram. The take profit condition is a 3% price increase trailing and the stop loss condition is a 1% price decrease trailing.
Now I’ll show you how to run the strategy on Coinrule and also back-test it using various coins and timeframes.
On the Coinrule rule, the page clicks to create a rule and then go to templates. Come to MACD. And find the fast EMA above the slow EMA with MACD. Click this you’ll get a short description of the strategy.
And this template will be pre-loaded into your strategy here.
So, all you have to do is select what timeframe you want the strategy and run on, the amount you want to buy with each trade, and which wallet you want to buy with. You can also run the strategy on any coin in the market or a specific coin you want. So, to figure out what time frame you want to run on, I’m going to come to TradingView here from our TradingView page, and find the strategy here.
Then, I’m going to test this on AXS in the five-minute time frame. In Favorites by typing in Fast EMA above Slow EMA you’ll be able to see some of the back-testing data as well. This is useful to see which timeframe works best.
From here, we can see that it suggests that this rule works better in the five-minute. For our example, five minutes time frame works for us
And then I want to buy $100 of that coin every time a buy signal is generated. I want to buy my USDT wall and execute it 100 times in total. Then you can click on Launch.
Your Strategy is live now!
To learn more and watch the video check our Youtube channel:
Learn more about the strategies you can run automatically on Coinrule.
Trade safely
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DISCLAIMER
I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.
