The MACD_EMA strategy is a backtesting strategy that combines the MACD (Moving Average Convergence Divergence) and EMA (Exponential Moving Average) indicators to generate buy and sell signals for trading. Here's a breakdown of how the strategy works:
It uses the populate_indicators function to calculate the MACD and EMA indicators for the given dataset. MACD: It calculates the MACD line, signal line, and histogram based on the input data.
EMA: It calculates the EMA with a long-term period of 200.
The populate_buy_trend function determines the conditions for a buy signal:
It checks if the MACD line has crossed above the MACD signal line.
It also checks if the closing price is above the EMA with a long-term period. The populate_sell_trend function determines the conditions for a sell signal:
It checks if the MACD line has crossed below the MACD signal line. It also checks if the closing price is below the EMA with a long-term period. The strategy has predefined values for minimal ROI (Return on Investment), stoploss, and timeframe. These values can be adjusted based on market conditions. The minimal ROI specifies the desired return at different time intervals. The stoploss defines the maximum acceptable loss before triggering a sell signal. The timeframe specifies the duration of each candlestick or data point. By backtesting this strategy on historical data, you can evaluate its performance and assess its effectiveness in generating profitable trading signals.