![]() ![]() Moving average crossover strategies aren't perfect but they are decent for trend following and can generate some good profits over time if done on the right stocks. The 11 and 49 EMA backtest was added to this article on April 4, 2021, 2 weeks after the original article was published (the backtest timing for that one will be off by about 2 weeks). ![]() The Golden Cross (50 SMA crossing 200 SMA).Testing on these 4 stocks can give some sort of idea of how the strategy can work with different kinds of tickers. The reason for testing 15-minute candles on GME is because people tend to trade shorter-term on "hype stocks" and because we want to test the strategies on more than just 1 time frame. The SPY will be tested over a period of 4000 daily candles, XLF will be 5000 daily candles, AMZN will be 2000 daily candles, and GME will be 3000 15-minute candles. Each ticker will be much different than the other. How to Backtest a Stock Trading Strategy - No Coding RequiredĤ tickers for each strategy. If you're unfamiliar with backtesting, check out this article here: Let me know what your results are with the 9/30 MA trading strategy.To determine this, we'll be backtesting the strategy on 4 tickers with 5 different moving average combinations. That’s it… now go and practice it on your demo account! What you actually do with this strategy is trading the pullbacks of a trend. The stronger the pullback, the stronger the trend usually continues. Can be used on all time frames, but the higher the time frame, the more reliable the signals and the less noise. ![]() Signal is also stronger just after a crossing of the moving averages.The deeper the candle above or below the moving average closes, the stronger the signal.Tips for the 9/30 trading strategyįinally, I want to give you some useful tips that you can keep in mind when you start using this trading strategy. ![]() I prefer to set my profit target at a risk to reward ratio of 1: 2 of my stop loss. So if my stop loss is $50 below my entry, I want to make a minimum of $100 profit. That way I only have to win 4 out of 10 trades to make steady profit. ?īut you can also take a profit manually. For example if the moving averages cross back again. With a short trade (selling) this works the same but the other way around. Entry, stop loss and target 9/30 MA strategy I always place my stop loss below the last low and with this strategy I would even put it under (when buying) or above (when selling) the moving averages. I hope that the entries (where you buy or sell) from this 9/30 trading strategy are clear. But where do you get out? Stop loss With all three entries you would have made a nice profit as price continued to fall. Winning short trade with the 9/30 trading strategyĪbove you see a chart of gold. The 9 EMA (blue) is below 30 WMA (red). In this downtrend I had three chances for an entry . Where you see the red arrows, the candles close above the 9 EMA. You place your sell orders (shorts) below the lows of those candles (small red horizontal lines). Winning short trade (selling)īelow is an example of a winning short trade with this strategy. Winning long trade with the 9/30 trading strategyĪbove you see a chart of Facebook. The 9 EMA (blue) is above the 30 WMA (red). The arrow points to the candle that closes below the 9 EMA. I place my buy order just above the high of that candle (red line) and it is triggered by the next candle.Īfter the buy order is hit the price of Facebook rises and gives us a nice profit. Place a saell order below the low of the candle that closes above 9 EMAīelow is an example of a winning long trade with this strategy.Place a buy order above the high of the candle that closes below 9 EMA.Wait until a candle closes below the 9 EMA.The chart is now set, so we’re ready to make some bad ass trades! Below are the trading rules for this 9/30 MA strategy, explaining when to buy (long) and sell (short). Give them both a different color. In this example I made the 9 EMA blue and the 30 EMA red, but you can use any color.Īfter you’ve done this you will see the moving averages on your chart, like this: Moving averages on your chart Rules for this trading strategy How to add them to your chart depends on which platform you use. 30-period Weighted Moving Average (WMA).9-period Exponential Moving Average (EMA).Get your free Hugo demo account here… Set indicators for the 9/30 trading strategyįor this trading strategy you need 2 moving averages as your main indicators: Looking for a simple trading strategy? I love new strategies and I’ve found another one for you: The 9/30 moving average setup.Īlways try a new trading strategy on a demo account first. ![]()
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