Guide
How does the Short Selling EMA Cross (By Coinrule) strategy work ?
This short selling strategy is designed for periods of downtrends and bearish market conditions, utilizing the exponential moving averages (EMAs) to determine entry points for short trades. It aims to sell as the price decreases further and buy back before a rebound, making it suitable for coins planned for long-term holding.
Key Components:
- Entry: Utilizes EMA 20 and EMA 50 on the 30-minute timeframe. A short position is entered when the EMA 20 crosses under the EMA 50, signaling a downward price trend.
- Exit: The exit strategy includes a take profit at -8% and a stop loss at +16% from the entry price. These parameters are widely placed to capture significant moves without being stopped out by temporary rallies.
Additional Notes:
- Backtesting shows a high profitability rate (93.33%) for this strategy.
- The strategy works well with automated bots and hedges investments by using only a percentage of the available holdings.
- Best applied to weak coins during downtends and bearish conditions, especially those with consistent and large token unlocks or highly inflationary tokenomics.
The strategy is designed to simulate trades using 30% of your holdings, with a 0.1% trading fee, reflecting Binance's base fee.