Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

10EMA Reverse Strategy in MCX Crude Hourly Charts

1 min read

Here is a very simple yet a powerful hourly strategy in MCX crude. I would like to call it as 10EMA Reverse strategy. i.e buy signal will generate in case of hourly candle closes below 10EMA and sell signal will generate if the candle closes above 10EMA.

How to Play – 10EMA Reverse Strategy

1)Every time the long and short position needs to be reversed whenever the signal arrives on the hourly timeframe
2)Position needs to be carry forwarded (Gap UP and GAP down risk is there)
3)Rs 100 brokerage is added in per leg transaction while backtesting (needs to be adjusted according to your brokerage structure)
4)Exit if the candle moves above 55-60 points on closing basis. Here stoploss is decided on closing basis.
5)Trade every time with two lots of MCX Crude

10 EMA Reverse

Results

10 EMA Reverse Strategy Results

Equity Curve
MCX Crude Portfolio Equity

 

Why this strategy could be profitable in MCX-Crude?
I have only very limited set of data. I backtested only with exisitng november month contrat and the data size covers only two months. But MCX market is a extended market nature i.e more than 12 hours in a per day session makes the market to trade in a compressed manner in a higher timeframes like a hourly timeframe which generates a lot of signals with a 10EMA indicator. Probably we are profitable on most of the contra trades due to the compressed nature of the trading instrument in hourly timeframe and we will be able to eat every small profits.

Can this strategy could be applied to other markets too?
You can’t apply this strategy in stock markets due to limited session(7-8 hours session per day) trade time compared to MCX or International forex markets. These kind of strategies normally works with commodities where the trendiness is very slow on the given timeframe.

Download Reverse 10 EMA strategy AFL code(Backtestable)

Put your opinions,observations and your experience here about this strategy and make it a better one!

Disclaimer : Strategy is provided here for study purpose only. Marketcalls will not be responsible for your losses/profits incurred. Do it at your own risk.

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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15 Replies to “10EMA Reverse Strategy in MCX Crude Hourly Charts”

  1. A good observation.I feel you can try in Natural gas as it suddenly goes deep up or down once in every week.I hope with your tools you can test and help.

  2. Buy signal will generate in case of hourly candle closes above 10EMA and sell signal will generate if the candle closes above 10EMA.

    Correct the mistake.

      1. Rajandran, In both ,i.e. BUY as well as SELL signals are generated you say when the “candle closes above 10EMA ! Its same in both cases, not possible. You probably mean to write :
        Reverse strategy. i.e buy signal will generate in case of hourly candle closes (above) below 10EMA and sell signal will generate if the candle closes above 10EMA.
        Its simply not possible to have both BUY and SELL when Candle closes above 10 EMA !!
        Its surely a typo ! 😛

  3. I tested it in MCX crude, it generates too many signals during non trending days. Difficult to make profits using this strategy.

    I feel super trend was better than this system

  4. I think you need to add some indicator for added confirmation or some higher value EMA to get a feel of Trend..that way lot of whips can be reduced & profitability maximized.. I am already using similar set up (as per suggestion given) in 15tf on stocks..Trade less- Trade Quality..
    Regards,
    Vikas

  5. Hello Rajandran and all. For testing I added the “iTrend Scalping Indicator” to gravity different timeframes, and reversed this “10EMA Reverse Strategy” for normal Buy/Sell signals. On the AmiBroker Backtest profits seems not so bad, but the trades listed in the Backtest report are less than trades plotted on the chart (up or down arrow), and are also different all the execution times between the bar chart trades (timeframe of 1 min. or 5 min.) and the Backtest trades. How can I fix this problem ? Thanks

  6. dear,
    sir plz help me to advice a perfact afl for tradeing in currency darivative and mcx crudeoil…with 90% accuracy or more acurrecy .i want less point but good accuracy with no loss. for intraday tradeing

  7. from 1 jan 2015 im newly taking up this strategy.the problem is from 10 – 25 th of everymonth whipsaw occurs mostly better avoid signals on those days.

  8. IF YOU WANT TO TRADE IN CRUDE POSITIONAL BASIS,USED SUPER TREND INDICATOR (10,3) IN 1 HOUR TIME FRAME. IT’S BETTER THAN ALL OTHER INDICATOR OR TRADING STRATEGY.

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