so many people on here have been using the EMA crossover and yet the guru already changed his strategy. Next time before trading, people should do their own backtesting and not choose a trading strategy based on a few trades of an anonymous person.
I'll help them out and show them the difference as well as explain my reasoning for trading the SMA.
Here's a summary of the data below. This simple comparison shows the difference in the two strategies. As you can see, the EMA is almost superior in every way when compared to the SMA.
Not for me, however:
- At this stage of life, I only have the time to trade the daily timeframe in BTC.
- However, I want to frequently trade.
- Additionally, I prefer to only trade strategies in which I can do the math of the indicators I am using quickly and easily.
- After all, if you don't know what goes into the colorful things on the screen, what makes you think that you will trust where they are pointing?
Which of the two strategies matches me best?
The EMA and SMA tell the same thing - which way the immediate trend is
- The EMA keeps you in a trade longer, which means that you will have a lower success ratio but a higher payout on trades that really move.
- The SMA gets you in a move earlier, which means that if price doesn't take off, you will more than likely have a profit rather than a loss.
Here is the SMA 10/21 crossover on hourly timeframes:
