The trading strategy outlined involves using a Double Exponential Moving Average (DEMA) and a Moving Average (MA) crossover to identify potential buy entries. By analyzing historical data, traders collect price information, apply the DEMA and MA, and identify times when the DEMA crosses below the MA. For example, if a crossover occurs, traders analyze market conditions, document past successful trades, and assess risks to refine their strategy further.
Setting up a robust monitoring system is the next step. This involves selecting a trading platform that supports DEMA and MA indicators and creating an alert system for crossover detection. Timely alerts ensure traders can react swiftly. Additionally, monitoring external factors such as market news can confirm potential entries and aid decision-making.
Executing trades based on signals is the final phase. Traders define clear entry rules using DEMA crosses, manage risks with stop-loss levels, and confirm trade signals with volume. By recording trades in a journal and reviewing performance, adjustments can be made to enhance effectiveness. Automation of execution can also improve efficiency.
The strategies
⛳️ Strategy 1: Analyse historical data
- Collect historical price data for the asset of interest
- Apply the DEMA and 9-period MA on the historical data
- Identify past instances where the DEMA has crossed below the MA
- Analyse market conditions during these crossover periods
- Look for patterns or trends that tend to follow these crossovers
- Document profitable entry points based on past crossovers
- Determine average holding time for profitable trades
- Calculate average returns from these trades
- Evaluate the risk associated with each crossover
- Craft insights into potential future behaviour
⛳️ Strategy 2: Set up a monitoring system
- Choose a reliable trading platform that supports DEMA and MA indicators
- Set up the DEMA and MA with a 9-period configuration
- Develop or integrate an alert system for crossover detection
- Configure alert settings to notify when the DEMA crosses below the MA
- Test alert functionality to ensure timely notifications
- Set desktops and mobile devices to receive notifications
- Decide on additional conditions to confirm potential entries
- Monitor market news that may affect the asset price
- Allocate specific trading hours for active monitoring
- Set system review intervals to ensure operational accuracy
⛳️ Strategy 3: Execute trades based on signals
- Define entry rules clearly, emphasising 9-period DEMA crossing below MA
- Specify risk management rules, such as stop-loss and take-profit levels
- Establish criteria for validating trade signals, such as volume confirmation
- Calculate position size based on risk tolerance and account size
- Record each trade's entry and exit conditions in a trading journal
- Review performance of trades periodically to assess strategy effectiveness
- Adjust strategy as necessary to improve performance metrics
- Consider automating the execution process for efficiency
- Keep abreast of market trends and adjust parameters accordingly
- Run simulations using past data to inform real-time decision making
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
