Strategy Logic

This strategy combines the MACD indicator with moving averages, going long when both give aligned signals.

The logic is:

1. Compute FAST MACD, typically 12-day EMA

2. Compute SLOW MACD, typically 26-day EMA

3. MACD is FAST minus SLOW

4. Signal line is typically 9-day MA of MACD

5. Compute 9-day and 26-day MAs

6. Consider long when MACD crosses above signal line

7. Go long when 9-day MA crosses above 26-day MA

8. Close long when MACD crosses below signal line and 9-day MA crosses below 26-day MA

The strategy taps MACD’s overbought-oversold gauge and MA’s trend following ability, combining both for higher odds trades.

Advantages

• MACD judges overbought/oversold, MA determines trend

• Combination provides high-probability long opportunities

• Clear rules easy to implement

Risks

• Requires optimization to determine best parameters

• LONG-only unable to use short opportunities

• With-trend trades may magnify losses

Summary

This strategy utilizes MACD and MA’s strengths in judging market rhythm. But LONG-only limitations and parameter optimization warrant caution.