One, core logic
Determine trend direction through EMA, verify momentum strength with MACD, filter overbought/oversold signals with RSI, and combine the three to select high-probability long opportunities while dynamically managing risk.
Two, indicator parameter setting
1. EMA (Exponential Moving Average)
- Short-term EMA: 12-day (quickly reacts to price changes)
- Long-term EMA: 26-day (confirm trend stability)
- Trend filter EMA: 50-day (determining medium to long-term direction)
Note: Parameters can be adjusted for different trading cycles (e.g. 4-hour/daily).
2. MACD (Moving Average Convergence Divergence)
- Fast line (MACD Line): 12-day EMA - 26-day EMA
- Slow line (Signal Line): 9-day EMA (EMA of MACD Line)
- Histogram: MACD Line - Signal Line
3. RSI (Relative Strength Index)
- Cycle: 14 days (default value)
- Overbought threshold: 70
- Oversold threshold: 30
Three, conditions for opening long positions
1. Trend confirmation (EMA)
- Short-term EMA (12) crosses above long-term EMA (26), forming a golden cross, and price stabilizes above EMA50.
- Ideal pattern: EMA12 > EMA26 > EMA50 (bullish arrangement).
2. Momentum verification (MACD)
- MACD line (fast line) crosses above signal line (slow line), forming a golden cross.
- Histogram turns from negative to positive and continues to expand (upward momentum strengthens).
- Avoid divergence: Price makes new highs while MACD does not synchronize with new highs, exercise caution.
3. Overbought/oversold filtering (RSI)
- RSI rises from the oversold area (<30) to above 50, or maintains in the 40-70 range (trend continuation).
- Rejection signal: Do not open positions when RSI > 70 (to prevent chasing highs).
4. Price action coordination
- Price rebounds after pulling back to EMA12/EMA26, or breaks through key resistance with increased volume.
Four, stop loss and take profit strategies
1. Stop loss setting
- Fixed stop loss: 1%-3% below the opening position (adjust according to leverage and volatility).
- Dynamic stop loss: Break below EMA26 or previous low support level (strict execution).
2. Take profit strategy
- Partial take profit:
- First target: Previous high resistance level or Fibonacci extension (1.618).
- Second target: Trailing take profit (e.g., exit when EMA12 breaks).
- MACD/RSI reversal signal: Reduce positions when MACD death cross or RSI overbought (>80).
Five, risk control and precautions
1. Leverage management: Contract leverage ≤ 10 times, avoid liquidation due to high volatility.
2. Time frame coordination: Daily chart determines trend, 1-hour/4-hour chart finds entry points.
3. Avoid choppy markets: Observe when EMA lacks clear direction and MACD histogram frequently crosses.
4. Major event avoidance: Reduce positions before Federal Reserve policies or black swan events at exchanges.
Six, case demonstration (BTC/USDT)
1. Trend confirmation: BTC daily EMA12 crosses above EMA26, and price stabilizes above EMA50.
2. MACD verification: Histogram turns from negative to positive, fast and slow lines golden cross and continue to rise.
3. RSI filter: RSI rises from 35 to 55, not overbought.
4. Entry point: Price rebounds after pulling back to 4-hour chart EMA12, open long position.
5. Exit: MACD high position death cross + RSI > 75, close 80%; remaining position if breaking below EMA26.
Seven, strategy optimization direction
1. Parameter adjustment: Based on the volatility of the cryptocurrency (e.g., shorten EMA periods for altcoins).
2. Volume-price combination: Increase transaction volume to amplify the effectiveness of confirmation signals.
3. Multi-indicator resonance: Combine with Bollinger Bands (breakthrough mid-track) or order flow data.
Summary: This strategy anchors trend direction through EMA, cross-validates with MACD and RSI, aims to capture short to medium-term bullish trends in cryptocurrency contracts, and requires strict discipline to avoid emotional trading.
