Three EMA Cross Strategy

The Three EMA Cross strategy combines a classic fast/slow moving average crossover with a longer trend filter. After the fast EMA crosses above the slow EMA, the strategy waits for a pullback to the fast average while the closing price remains above a broader trend EMA. This setup attempts to capture continuation moves after a brief retracement within the prevailing trend.

Positions are exited when momentum fades and the fast EMA crosses back below the slow EMA. A percentage-based stop loss protects the position if price moves against the trade. The technique works well on markets with persistent trends and tends to avoid choppy ranges.

Details

• Entry Criteria:
  • Recent fast EMA cross above slow EMA within last N bars.
  • Current close ≥ fast EMA and session low ≤ fast EMA.
  • Trend EMA ≤ current close.
• Long/Short: Long only.
• Exit Criteria:
  • Fast EMA drops below slow EMA.
• Stops: Stop loss at stop_loss_percent of entry price.
• Default Values:
  • FastEmaLength = 10
  • SlowEmaLength = 20
  • TrendEmaLength = 100
  • StopLossPercent = 2.0
  • CrossBackBars = 10
• Filters:
  • Category: Trend following
  • Direction: Long
  • Indicators: EMA
  • Stops: Yes
  • Complexity: Medium
  • Timeframe: Any
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium