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Strategy vault / Trend following

Quadruple EMA Indicators Trading Strategy

This strategy uses four EMA lines with different parameters to form a clear trend-following system for mechanical trading. It aims to track medium-long term trends using a dual EMA crossover method. Strategy Logic…

Pine ScriptTrend followingEMA
Author
ChaoZhang
Complexity
Starter · 37 lines
Parameters
4
Backtest bar
2h · intraday
Tested on
BTC/USDT · futures
Jump to codeView in vaultOriginal on FMZ

This strategy uses four EMA lines with different parameters to form a clear trend-following system for mechanical trading. It aims to track medium-long term trends using a dual EMA crossover method.

Strategy Logic:

  1. Calculate two fast and slow EMA pairs, typically 72 and 44 periods.

  2. Go long when fast EMA crosses above slow EMA.

  3. Go short when fast EMA crosses below slow EMA.

  4. Use colors to mark buy and sell signals.

  5. Backtest over specified period to execute signals.

Advantages:

  1. Four EMAs form clear trend patterns.

  2. Fast/slow EMA combos effectively track medium-long trends.

  3. Crossover rules are simple and avoid overtrading.

Risks:

  1. EMA lag may cause missed trend turns.

  2. No stops means unlimited loss on single trades.

  3. Poor parameters may cause excessive signals or inconsistencies.

In summary, the quadruple EMA crossover strategy uses fast/slow EMA pairs for mechanical trend trading. The visual interface is intuitive for visual traders. But the lag and lack of stops means prudent risk management is still required for long-term steady gains.

Parameters

NameDefaultWhat it controls
v_input_144EMA Slow, always < EMA Fast - low short term, high long term
v_input_272EMA Fast - low short term, high long term
v_input_314Period
v_input_4120Resolution - not lower than chart

Source Pine Script

/*backtest
start: 2023-08-12 00:00:00
end: 2023-09-11 00:00:00
period: 2h
basePeriod: 15m
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/

// strategy(title = "Cuathro EMA Strategy", shorttitle = "Cuathro EMA",initial_capital=1000, commission_value=0.2, commission_type =strategy.commission.percent, default_qty_value=100 , overlay = false, pyramiding=10, default_qty_type=strategy.percent_of_equity)
//@Moneros 2017
// based on OCC by @JayRogers
emaSlowPeriod    = input(defval = 44, title = "EMA Slow, always < EMA Fast - low short term, high long term ", minval = 1)
emaFastPeriod    = input(defval = 72, title = "EMA Fast - low short term, high long term ", minval = 1)
len    = input(defval = 14, title = "Period", minval = 1)
res = input(title="Resolution  - not lower than chart", defval="120")



closeSeries =  request.security(syminfo.tickerid, res, 2 * ta.ema(close, len) - ta.ema(ta.ema(close, len), len)  )
openSeries  = request.security(syminfo.tickerid,res, 2 * ta.ema(close[1], len) - ta.ema(ta.ema(close[1], len), len)  )


slowema = ta.ema(closeSeries - openSeries,emaSlowPeriod)
fastema = ta.ema(closeSeries - openSeries,emaFastPeriod)

plot(slowema, color=color.blue)
plot(fastema,color=color.red)


bgcolor(slowema< fastema ? color.red : na, transp=90)
bgcolor(slowema> fastema ? color.blue : na, transp=90)

bgcolor(ta.crossover(slowema, fastema) ? color.blue : na, transp=40)
bgcolor(ta.crossunder(slowema, fastema) ? color.red : na, transp=40)
strategy.order("BUY", strategy.long, 1, when = ta.crossover(slowema, fastema))
strategy.order("SELL", strategy.short, 1, when = ta.crossunder(slowema, fastema))

Published by ChaoZhang on the FMZ strategy square · last modified 2023-09-12. Collected in the Quant Trading Vault. Unvalidated research: re-test with your own data and costs before trusting it.

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