The MACD_EMA strategy is a trading strategy that uses the MACD (Moving Average Convergence Divergence) and EMA (Exponential Moving Average) indicators to generate buy and sell signals. Here's a breakdown of what the strategy does:
The strategy uses a long-term EMA (200-period) as a trend indicator. It calculates the MACD indicator, which consists of three components: MACD line, signal line, and histogram.
The MACD line represents the difference between two EMAs, the signal line is a moving average of the MACD line, and the histogram shows the difference between the MACD line and the signal line.
The strategy generates a buy signal when the MACD line crosses above the signal line and the close price is above the EMA.
It generates a sell signal when the MACD line crosses below the signal line and the close price is below the EMA. The strategy sets a minimal ROI (Return on Investment) for different timeframes. The ROI determines the profit target for each trade. The values provided are: 1% ROI for 60 minutes, 3% ROI for 30 minutes, 4% ROI for 20 minutes, and 5% ROI for 0 minutes (immediate exit). It sets a stop loss at -0.25, meaning that if the trade goes against the strategy by 0.25%, it will be automatically sold to limit potential losses. The strategy operates on a 5-minute timeframe, meaning it analyzes price data at 5-minute intervals. Overall, the MACD_EMA strategy combines the MACD and EMA indicators to identify potential trends and generate buy and sell signals based on their crossovers. It aims to take advantage of short-term price movements and achieve a predefined ROI while minimizing potential losses with a stop loss.