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Strategy vault / Trend following

The Genesis Crossover Trading Strategy

The Genesis trading strategy is a trend following strategy that uses a crossover of two exponential moving averages (EMAs) to generate trade signals. How it Works The strategy uses a faster EMA (default 20 periods)…

Pine ScriptTrend followingMomentumEMA
Author
ChaoZhang
Complexity
Starter · 36 lines
Parameters
0
Backtest bar
1d · swing
Tested on
BTC/USDT · futures
Jump to codeView in vaultOriginal on FMZ

The Genesis trading strategy is a trend following strategy that uses a crossover of two exponential moving averages (EMAs) to generate trade signals.

How it Works

The strategy uses a faster EMA (default 20 periods) and a slower EMA (default 50 periods). When the faster EMA crosses above the slower EMA, a long position is taken. When the faster EMA crosses below the slower EMA, a short position is taken.

The crossovers aim to capture the start of short-term and long-term trends. The longer EMA provides trend direction and the shorter EMA gives signal sensitivity.

Benefits

The main advantages of this strategy are:

Simple and easy to implement Captures momentum from trend continuations Long and short signals for flexibility Customizable EMA lengths Risks

Some potential risks and drawbacks include:

Whipsaws possible during range-bound markets Lagging signals in quickly reversing markets No stop loss defined, can lead to large drawdowns The Genesis strategy works well when strong directional trends occur. Sideways choppy markets may trigger false signals and stop outs. Using proper risk management is advised.

Source Pine Script

/*backtest
start: 2023-01-01 00:00:00
end: 2023-06-15 00:00:00
period: 1d
basePeriod: 1h
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/

// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © genesisjgonzalezh

//@version=5
strategy("GENESIS", overlay=true)

lenght1= (20)
lenght2= (50)

ema1= ta.ema(close, lenght1)
ema2 = ta.ema(close, lenght2)

long = ta.crossover(ema1,ema2)


short = ta.crossover(ema2,ema1)

LongSignal  = ta.crossover (ema1,ema2)
ShortSignal = ta.crossunder (ema1,ema2)
plotshape(LongSignal , title="Señal para Long", color= color.green, location=location.belowbar, size=size.tiny, text="Long", textcolor=color.white)
plotshape(ShortSignal , title="Señal para Short", color= color.red, location=location.abovebar, size=size.tiny, text="Short", textcolor=color.white)

strategy.entry("long", strategy.long, when = long)
strategy.exit("Exit", "Long", profit = 10, loss = 2)
strategy.entry("short", strategy.short, when = short)
strategy.exit("Exit", "short", profit = 10, loss = 2)

Published by ChaoZhang on the FMZ strategy square · last modified 2023-09-10. Collected in the Quant Trading Vault. Unvalidated research: re-test with your own data and costs before trusting it.

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