Overview

This is a tracking stop loss trading strategy based on moving average. It uses two EMA lines with different periods to generate golden cross and dead cross signals for long and short trades. Meanwhile, the strategy utilizes percentage or fixed points method to trail stop loss and take profit levels. This allows the strategy to lock in profits while effectively controlling risks.

Strategy Logic

The strategy employs fast and slow EMA lines. The fast EMA reacts sensitively while the slow EMA moves in a more stable manner. Golden cross is formed when the two lines move up to intersect, generating buy signals. Dead cross occurs when they intersect downwards, prompting sell signals. This is the underlying rationale behind moving average strategies.

On top of that, the strategy trails stop loss and profit target once trade is entered. Specifically, the stop loss and profit target levels will adjust towards favorable direction as price fluctuates. This allows profits to be locked while risks are capped. The trailing pace can be configured using percentage or fixed points. This makes the stop loss and take profit mechanism more flexible and intelligent.

Advantages

1. Utilizes dual EMA crossovers to generate quality signals and steady returns.
2. Trailing stop loss and take profit locks in profits and controls risks effectively.
3. Supports both percentage and fixed points for flexible trailing.
4. Performs well in long run with trailing mechanism.

Risks & Optimization

1. Overly frequent stop loss triggers may impact profitability in ranging markets. Widen stop loss zone or increase activation level of trailing.
2. EMA crossover signals have lagging effect and may miss some opportunities. Consider adding Momentum to improve sensitivity.
3. Insufficient backtest data may cause overfitting. Validate thoroughly across longer timeframe and more products.

Conclusion

The strategy integrates the strengths of moving average signaling and trend tracking techniques. It demonstrates steady and stellar performance over long term and possesses practical value for live trading. Further improvements can be achieved through parameter tuning and combination optimization. The strategy merits real-world verification.