Overview of the Strategy

Objective: The primary goal of this trading strategy is to leverage a combination of MACD, RSI, and EMA indicators to pinpoint potential entry and exit points for both long and short trades. This strategy is designed to take advantage of market trends and shifts in momentum.

Indicators Employed:

• MACD: A momentum indicator that illustrates the relationship between two moving averages of a security's price.
• RSI: A momentum oscillator that gauges the speed and change of price movements, indicating whether a market is overbought or oversold.
• EMA: A variant of the moving average that gives more weight to the most recent data points.

Trading Guidelines

• Long Entry: Initiate a long position when:
  • The MACD line crosses above the signal line.
  • The RSI exceeds a certain threshold.
  • The closing price is above the EMA.
• Short Entry: Initiate a short position when:
  • The MACD line crosses below the signal line.
  • The RSI is below a certain threshold.
  • The closing price is below the EMA.
• Exiting Long Positions: Close a long position when:
  • The MACD line crosses below the signal line.
  • The RSI falls below a specified threshold.
  • The closing price dips below the EMA.
• Exiting Short Positions: Close a short position when:
  • The MACD line crosses above the signal line.
  • The RSI rises above a specified threshold.
  • The closing price climbs above the EMA.

Code Implementation

Below is the Pine Script code that executes this strategy in TradingView:

//@version=5

strategy("MACD, RSI, EMA Strategy with Long and Short Orders", overlay=true)

// Define MACD parameters

fastLength = input(12, title="MACD Fast Length")

slowLength = input(26, title="MACD Slow Length")

signalSmoothing = input(9, title="MACD Signal Smoothing")

[macdLine, signalLine, _] = ta.macd(close, fastLength, slowLength, signalSmoothing)

// Define RSI parameters

rsiLength = input(14, title="RSI Length")

rsiSource = close

rsiLongThreshold = input(50, title="RSI Long Threshold")

rsiShortThreshold = input(50, title="RSI Short Threshold")

rsi = ta.rsi(rsiSource, rsiLength)

// Define EMA parameters

emaLength = input(200, title="EMA Length")

ema = ta.ema(close, emaLength)

// Entry and Exit Conditions

longCondition = ta.crossover(macdLine, signalLine) and rsi > rsiLongThreshold and close > ema

shortCondition = ta.crossunder(macdLine, signalLine) and rsi < rsiShortThreshold and close < ema

exitLongCondition = ta.crossunder(macdLine, signalLine) or rsi < rsiLongThreshold or close < ema

exitShortCondition = ta.crossover(macdLine, signalLine) or rsi > rsiShortThreshold or close > ema

// Plotting

plot(ema, title="EMA", color=color.blue)

plotshape(series=longCondition, title="Long Entry", location=location.belowbar, color=color.green, style=shape.labelup, text="BUY")

plotshape(series=shortCondition, title="Short Entry", location=location.abovebar, color=color.red, style=shape.labeldown, text="SELL")

plotshape(series=exitLongCondition, title="Exit Long", location=location.abovebar, color=color.yellow, style=shape.labeldown, text="EXIT LONG")

plotshape(series=exitShortCondition, title="Exit Short", location=location.belowbar, color=color.orange, style=shape.labelup, text="EXIT SHORT")

// Strategy Execution

if (longCondition and strategy.opentrades == 0)

strategy.entry("Long", strategy.long)

if (shortCondition and strategy.opentrades == 0)

strategy.entry("Short", strategy.short)

if (exitLongCondition)

strategy.close("Long")

if (exitShortCondition)

strategy.close("Short")