Precise EMA Cross Strategy (20, 50, 200)

Precise EMA Cross Strategy (20, 50, 200)

🧠 Core Concept:
This strategy is designed to capture major trend reversals using Exponential Moving Averages (EMAs) and avoid false signals by requiring:

A confirmed EMA crossover (Golden/Death Cross).

Confirmation from the trend direction (slope) of the 200 EMA.

The price to be aligned with the direction of the signal (above or below EMAs).

📊 Components:
EMA 20 (Green): Short-term price momentum.

EMA 50 (Red): Medium-term trend reference.

EMA 200 (Yellow): Long-term trend foundation.

✅ Trade Entry Rules:
🔼 Buy Signal (Golden Cross):
Occurs when:

EMA 50 crosses above EMA 200.

The slope of EMA 200 is upward, confirming long-term uptrend.

Price is above both EMA 50 and EMA 200, showing bullish market strength.

🔔 You'll see a green "BUY" marker below the candle.
This is a high-probability long entry setup.

🔽 Sell Signal (Death Cross):
Occurs when:

EMA 50 crosses below EMA 200.

The slope of EMA 200 is downward, confirming a bearish trend.

Price is below both EMA 50 and EMA 200, confirming weakness.

🔔 You'll see a red "SELL" marker above the candle.
This is a high-probability short entry setup.

📅 Best Timeframes to Use:
Swing trading: 1H, 4H, Daily

Position trading: Daily, Weekly

Not suitable for scalping on low timeframes (e.g. 1min or 5min) due to EMA smoothing delay

🧪 Backtesting Tips:
Look for confirmation on higher timeframes (e.g., 4H or 1D).

Combine this strategy with:

RSI divergence

Volume spikes

Support/resistance zones

⚠️ Avoid False Signals:
Do not trade if the slope of EMA 200 is flat or conflicting with the crossover.

Avoid trading in sideways markets or low-volatility environments.

🔔 Alerts:
The script includes built-in alert conditions:

Golden Cross Alert

Death Cross Alert
Set them in TradingView’s alert panel to get notified when a valid trade setup forms.

💡 Example Trade Flow:
BUY Example:
1H chart: EMA 50 crosses above EMA 200 ✅

Slope of EMA 200 is rising ✅

Price is above both EMAs ✅
➡️ Enter a long position
🎯 Set take profit at previous resistance or use trailing stop
🛑 Stop loss just below recent swing low or EMA 200

SELL Example:
4H chart: EMA 50 crosses below EMA 200 ✅

Slope of EMA 200 is falling ✅

Price is below both EMAs ✅
➡️ Enter a short position
🎯 Set TP at support or use trailing
🛑 SL above recent swing high or EMA 200

🧩 Combine With:
Candlestick patterns (e.g., engulfing, pin bar)

Breakout levels

Fibonacci retracement zones