EMA Crossover with RSI Filter

hace 13 horas

EMA Crossover with RSI
Overview:

This strategy capitalizes on trend shifts by using a fast EMA (6-period) crossing a slow EMA (200-period) combined with an RSI filter for confirmation. It is optimized for a 4-hour timeframe to capture medium-term trends with fewer noise signals. Starting with an initial capital of $100, it reinvests 100% of equity in each trade and includes a 0.05% commission for realistic backtesting.
Strategy Setup:

Suggested Timeframe: 4-hour chart for balanced trend-capturing and signal accuracy.
Initial Capital: $100
Position Size: 100% of current equity per trade.
Commission: 0.05% per trade to simulate actual trading costs.

Indicators Used:

EMA (Exponential Moving Average):
6-period EMA: Tracks short-term price movements.
200-period EMA: Represents long-term trend direction.
RSI (Relative Strength Index):
14-period RSI: Adds a momentum filter to avoid false entries.

Entry and Exit Conditions:

Long Entry Condition:
Triggered when the 6-period EMA crosses above the 200-period EMA (bullish crossover).
RSI must be above 50 to confirm positive momentum.
When both conditions are met, a long position is opened.

Exit Condition:
The long position closes when the 6-period EMA crosses below the 200-period EMA (bearish crossover) and RSI is below 50, signaling a trend reversal.

Chart Display:

EMA Plots:
6-period EMA in green for short-term trends.
200-period EMA in red for long-term trend direction.

The 4-hour timeframe and commission consideration allow for realistic backtesting with an accurate view of net performance over time.