EMA Spread
Gunbot leverages the Exponential Moving Average (EMA) to devise a technique that seeks to purchase at the beginning of an uptrend and sell as prices start to descend. This is accomplished by observing the spread between fast and slow EMAs, with buying happening when the spread starts to shrink and selling occurring when the spread narrows again due to falling prices.
The spread is computed each cycle by deducting the lowest EMA value from the highest EMA. Beyond this primary indicator, various tools can be employed to fine-tune buy and sell signals. For instance, the Relative Strength Index (RSI) can be utilized as a supplementary signal.
spread Computation
The spread is determined each cycle by deducting the lowest EMA value from the highest EMA.
Utilizing the Technique
Purchase Method Requirements
A buy order is permitted when the EMA spread narrows and the slow EMA is above the fast EMA. Furthermore, the spread must be at least as large as the emaspread %.
Sales Method Requirements
A sell order is allowed when the EMA spread narrows and the fast EMA is above the slow EMA. Additionally, the spread must be at least as substantial as the emaspread %
:::Info Profit protection is not mandatory for this strategy.
Keep in mind that this might result in sell orders below your break-even point. :::
Trading Illustration
An example illustrating the performance of trading with this strategy. Parameters and configuration.
The graphic below illustrates the factors that activate trades using this strategy.
