EMA + MACD Momentum Strategy

Strategy Vault
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Timeframe: Intraday (adjustable based on personal preference)

Indicators Needed:

  1. Exponential Moving Averages: 5, 13, 50, 200, 800

  2. Session range marking tool (to define key market opens)

  3. TDI (Traders Dynamic Index)

  4. MACD (Fast: 7 or 2, Slow: 21)

Strategy Rules:

  1. Two Main Entry Triggers

    • Price closes beyond the 13 EMA

    • MACD crossover (fast over slow for longs, slow over fast for shorts)

  2. Additional Confirmation

    • TDI signal line cross (often aligns with MACD crossover)

  3. Active Trading Windows

    • Primary: 9:30 AM – 11:15 AM

    • Secondary: 1:00 PM – 3:00 PM

  4. **Pullback Entries
    **
    Look for retracements of roughly 33% or 50% of the preceding move before entering.

  5. Profit Taking

    • If profits at the 50 EMA or 200 EMA meet at least a 1:1 RR, consider partial or full exit.

    • If EMAs are tightly clustered, wait for a strong “shift candle” that pushes through all EMAs before looking for entries.

Risk Management:

  1. A close beyond the 13 EMA in the opposite direction is an exit signal.

  2. For low volatility stocks, aim for smaller profit targets; for high volatility stocks, aim for larger ones — adjust based on ATR.

  3. Once 1:1 RR is achieved, move stop to breakeven.

  4. If no valid setup appears during the primary window, only look for trades in the secondary window.

Tips/Notes:

  • If the breakout candle is large (relative to the stock’s typical range), only enter on a 50% pullback. Avoid entries if the candle is abnormally huge.

  • Look for clean, full-bodied candles; avoid entries when the trigger candle has long wicks against your trade direction.

  • Avoid trading immediately before or during major news events or earnings announcements.

So what do you guys think about this strategy? I have backtested this a bit on some major currency pairs but not equity. Do you think this will work well in Indian markets?

Disclaimer:
This is for educational purposes only and not financial advice. Always backtest and paper trade before risking capital.