The strategy focuses on using Exponential Moving Average (EMA) crossovers for making trading decisions. It primarily employs the Golden Cross and Death Cross strategies. For example, the Golden Cross strategy involves the 7-day EMA crossing above the 17-day EMA, indicating a potential upward trend. To confirm, traders should look for increased trading volume and validate with additional technical indicators such as RSI.
The Death Cross strategy is somewhat the opposite, where the 7-day EMA crosses below the 17-day EMA, suggesting a downward trend. Valid confirmation comes from monitoring trade volumes and using technical indicators like MACD. To refine entries, backtesting and using tools like the stochastic oscillator and Fibonacci retracement are suggested.
The strategies
⛳️ Strategy 1: Implement the Golden Cross Strategy
- Identify a stock with a strong upward trend
- Plot 7-day and 17-day EMAs on the premium chart
- Wait for the 7-day EMA to cross above the 17-day EMA near a significant support level
- Confirm market conditions with higher volume at the crossover
- Use technical indicators to validate the upward momentum
- Monitor the stock for a break above the last high point
- Check additional confirmation with RSI indicating overbought conditions if applicable
- Execute a buy call once the criteria above are met
- Set a stop loss slightly below the recent support level
- Regularly review the position and adjust stop loss as needed
⛳️ Strategy 2: Utilise the Death Cross Strategy
- Find a stock exhibiting a strong downward trend
- Overlay 7-day and 17-day EMAs on the premium chart
- Wait for the 7-day EMA to cross below the 17-day EMA near a significant resistance level
- Ensure there is higher volume at the crossover for validation
- Use additional technical indicators to confirm downward momentum
- Look for a break below the last low point as further confirmation
- Ensure MACD supports the bearish outlook
- Initiate a buy put option once the conditions are confirmed
- Secure a stop loss slightly above the recent resistance level
- Continuously review the position and adjust strategies accordingly
⛳️ Strategy 3: Optimise EMA Crossover Entries
- Backtest historical data for validating 7-day and 17-day EMA effectiveness
- Use stochastic oscillator to help fine-tune entry points
- Conduct thorough research on stocks with consistent movement patterns
- Keep economic calendar events in consideration for timing trades
- Apply a confirmation strategy with Fibonacci retracement levels
- Utilise momentum indicators like ADX for trend strength assessment
- Track daily news related to selected stocks for influence factors
- Implement risk management tools to cap potential losses
- Regularly re-evaluate strategy effectiveness with quarterly reviews
- Stay updated with trading blogs and forums for community insights
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
