Overview
This strategy is a trend-following trading system based on multiple indicators including moving average, MACD and RSI. It identifies market trends through the crossover of fast exponential moving average (EMA) and slow EMA, and combines RSI overbought and oversold signals with MACD trend confirmation to find entry opportunities. The strategy is designed mainly for the foreign exchange market, and improves the accuracy and reliability of transactions through the coordination of multiple technical indicators.

Strategy Principle
The strategy uses a 50-period and 200-period dual EMA system as the main trend judgment basis. When the fast EMA (50-period) crosses the slow EMA (200-period), it is determined to be an upward trend; otherwise, it is a downward trend. After confirming the trend direction, the strategy uses the 14-period RSI indicator and the MACD indicator with 12/26/9 parameter settings as auxiliary confirmation signals. The specific trading rules are as follows:

• Long conditions: fast EMA is above slow EMA (upward trend) + RSI is greater than 55 (upward momentum) + MACD line is above the signal line (upward confirmation)
• Short selling conditions: fast EMA is below slow EMA (downward trend) + RSI is less than 45 (downward momentum) + MACD line is below the signal line (downward confirmation)
• Closing conditions: When the trend reverses or MACD diverges

Strategy Advantages

1. Multiple technical indicators verify each other, which can effectively reduce false signals
2. The EMA system is more stable in identifying trends and is not easily affected by short-term fluctuations.
3. The introduction of the RSI indicator can help identify overbought and oversold areas and avoid entering the market in an overextended market.
4. The use of the MACD indicator helps to confirm trend continuation and potential turning points
5. The strategy logic is clear, the parameters are highly adjustable, and it can adapt to different market environments.

Strategy Risks

1. Multiple indicator systems may cause delayed signals and miss good entry points in fast-moving markets.
2. EMA systems may generate frequent false breakout signals in a sideways market
3. The settings of RSI and MACD may need to be optimized according to different market environments.
4. In a highly volatile market, larger drawdowns are possible
5. The strategy is highly dependent on trends and may not perform well in volatile markets.

Strategy Optimization Direction

1. Introducing adaptive indicator parameter settings to enable strategies to automatically adjust according to market volatility
2. Add volume indicators as auxiliary confirmation to improve signal reliability
3. Develop dynamic stop-loss and stop-profit mechanisms to better control risks
4. Consider adding a market volatility filter to adjust position sizes during periods of high volatility
5. Add time filter to avoid entering the market during unfavorable trading hours

Summary
This is a trend-following strategy with a reasonable design and clear logic. Through the coordinated use of multiple technical indicators, it can better grasp the market trend. The advantage of the strategy lies in its robust trend-following ability and clear signal system, but it also has problems such as signal lag and strong dependence on the market environment. Through the proposed optimization direction, the strategy is expected to further improve its adaptability and profitability while maintaining its robustness.

Strategy source code

/*backtest
start: 2019-12-23 08:00:00
end: 2024-12-10 08:00:00
period: 1d
basePeriod: 1d
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/

// This Pine Script™ code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © YDMykael

//@version=6
//@version=5
strategy("TrendScalp Bot", overlay=true, default_qty_type=strategy.percent_of_equity, default_qty_value=100)

// Inputs for indicators
fastEMA = input.int(50, title="Fast EMA")
slowEMA = input.int(200, title="Slow EMA")
rsiPeriod = input.int(14, title="RSI Period")
macdFast = input.int(12, title="MACD Fast Length")
macdSlow = input.int(26, title="MACD Slow Length")
macdSignal = input.int(9, title="MACD Signal Length")

// Indicators
fastEMAValue = ta.ema(close, fastEMA)
slowEMAValue = ta.ema(close, slowEMA)
rsiValue = ta.rsi(close, rsiPeriod)
[macdLine, signalLine, _] = ta.macd(close, macdFast, macdSlow, macdSignal)

// Trend detection
isUptrend = fastEMAValue > slowEMAValue
isDowntrend = fastEMAValue < slowEMAValue

// Entry conditions
longCondition = isUptrend and rsiValue > 55 and macdLine > signalLine
shortCondition = isDowntrend and rsiValue < 45 and macdLine < signalLine

// Plot EMA
plot(fastEMAValue, color=color.blue, title="Fast EMA")
plot(slowEMAValue, color=color.red, title="Slow EMA")

// Buy/Sell signals
if (longCondition)
    strategy.entry("Buy", strategy.long)
if (shortCondition)
    strategy.entry("Sell", strategy.short)

// Exit on opposite signal
if (not isUptrend or not (macdLine > signalLine))
    strategy.close("Buy")
if (not isDowntrend or not (macdLine < signalLine))
    strategy.close("Sell")

// Alerts
alertcondition(longCondition, title="Buy Alert", message="TrendScalp Bot: Buy Signal")
alertcondition(shortCondition, title="Sell Alert", message="TrendScalp Bot: Sell Signal")

Strategy Parameters

The original address: EMA-MACD Composite Strategy for Trend Scalping