5-20 ema cross over or 9-21 ema cross over for short term trading.Please help me.
Assuming you are a beginner trader, and is now ready to take a lot of risk, you could start with a 5 over 20 ema crossover for short-term trading.
As you gain experience you will realize that higher the ema’s for crossover the signal gets better.
After a few months, you will automatically be looking for 20 over 50 ema crossover.
After a few years have passed, now that you have witnessed a few market cycles, you are now looking for 100 over 200 ema crossovers.
This is a process for improvising yourself into pro trader. One thing to remember, do not loose all your chips too early.
I feel 14-73 EMA crossover works the best for Nifty and BankNifty indices in NSE. The numbers look odd but they give the most profitable results in backtest for last 8 years. Here is the backtest summary:
|Backtest Period||02-Jan-2007 to 09-02-2016||02-Jan-2007 to 09-02-2016|
|Net Profit %||254.37%||763.58%|
|Annual Return %||14.90%||26.70%|
|Number of Trades||36||36|
|Winning Trade %||22.22%||38.89%|
|Average holding Period||61.28 periods||60.92 periods|
|Max consecutive losses||9||4|
|Max system % drawdown||-59.29%||-59.40%|
|Max Trade % drawdown||-22.08%||-97.77%|
Read more about his strategy with the downloadable AFL code in the below link:
You use any EMA crossover strategy but there will always be whipsaws in sideways market. Think of how to avoid trading in these sideways markets.