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.
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 **stoplosspercent** 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