Achieve Consistent Profits: Harness the Power of the 10/20 EMA Crossover - Eliminate Drawdown!
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- Опубликовано: 9 апр 2023
- Unlocking the magic of the 10 & 20 EMA crossover strategy. Explore how this powerful technical analysis tool can enhance your trading performance in today's dynamic market. In this video, we break down the mechanics of the 10/20 EMA crossover technique, showcase back tested results, and demonstrate its effectiveness in reducing drawdown.
Simple Moving Averages (SMA's) are very good at smoothing out market noise, however the Exponential Moving Averages (EMA's) do the same but offer better reaction time.
Using the EMA strategy on the weekly chart has proven to be highly effective in determining overall market strength/direction.
I hope you find value!
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I'm favoured, $60k every week! I can now give back to the locals in my community and also support God's work and the church. God bless America..
That's awesome
Which source/platform did you use to earn such huge sum of money?
As I know it's possible, I'd appreciate it if you showed me how to do it.
It was with the help of Cassandra Roberts i am who i am today
I know I'm blessed if not I wouldn't have met someone who is as spectacular as Mrs Cassandra Roberts
Saving money for a market downturn is likewise a bad idea. There are numerous ways to look at recessions and depressions, we cannot always expect to make large returns, and taking chances is better than doing nothing. The bottom line is that you will achieve remarkable results by diversifying your portfolio and making wise decisions. My portfolio's raw earnings rose by $320k in just 5 months.
Despite my confidence in your advice, my recent stock purchases, and the fact that I am an AMC shareholder, I haven't been able to accumulate anything. I had already been in the hole for too long prior to the downturn. What's the investing procedure?
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I’m glad I pulled through, despite the crises. I am retiring next yr at 55 with 3 houses paid off worth 4.5 million . One is my place of residence the other 2 properties will give me $80,000per/yr rent . I will have an income stream of $20,000 per yr through my super which gives me total $100,000 a yr to live comfortably . I have no debts ... Stay Motivated!!
You have done great for yourself. I understand the fact that tomorrow isn't promised to anyone, but investing today is a hard thing to do for me now because I have no idea of how and where to invest in. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path...
@@LucyHyde-zx8gq Find stocks with market-beating yields and shares that at least keep pace with the market for a long term. For a successful long-term strategy I recommend you seek the guidance a broker or financial advisor.
Very true , I diversified my $400K portfolio across multiple market with the aid of an investment advisor, I have been able to generate over $900k in net profit across high dividend yield stocks, ETF and bonds in few months.
@@MarkSlavin1 Please can you leave the info of your investment advisor here? I’m in dire need for one.
@@DarleneMurphy774 My advisor is ‘’Laura Marie Ray’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
Great video. I watch several youtube videos on how to trade in the market but haven’t made any headstart because they are either talking some gibberish or sharing their story
of how they made it and I do not want to make mistakes by taking risks in my own handswil
The best strategy to use in trading is to trade with a personal trader that understands the market very well, that way maximum profit is guaranteed, I'll highly recommend Katrina susan, she is my current account manager with Rocketta and the bot strategies are working
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You can reach her through TELEGRAM
Katrinasusan is the name to look for
Becoming a good trader takes time and patience. When i first got into trading i was liquidated twice, and lost my entire mortgage deposit. I could have given up, but decided to learn how to trade and put it into practice. 4 years later and i am glad i made that decision.
The 1% Millionaires stay rich by staying off high interest debts and investing passively. Personally i made my first million from having investments that spreads across stocks, etfs, coins and bonds. What i can say to early investors is diversification and solid management..at this point I'm actually grateful for my advisor ‘’JULIE ANNE HOOVER.. it's been great.
i'm happy there are lots of people doing so well...Love this channel for the transparency
@@tudorrwilson Can't divulge much “JULIE ANNE HOOVER” is the advisor that oversees my portfolio. She's an extremely intelligent person, very thoughtful, cautious, and has an outstanding credentials, it's easy to find her on the web.
Can I ask you if you tell us your favorite indicators?
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for...
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
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You can look her up online
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With the ongoing effects of high inflation, lower forecasted stock market returns, and stagnant wages, achieving a secure early retirement could be more challenging than ever before.
An obvious way to invest for a recession is to buy shares in businesses that are likely to experience steady demand even in a downturn. Typically, those are consumer staples, utilities, and heathcare companies, but off course such decisions cannot be made by an average Joe, a financial advisor is important in making this decisions
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Catherine Gauthier.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.
She is my family's personal Broker and also a personal Broker to many families in the United states, she is a licensed broker and a FINRA AGENT in the United States.
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I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
I think that although this was well put, it is not for me. Considering a short-term-minded, middle-income young person with a constant need for cash, are they still recommended? I am new to all this and have incurred so many losses that I am beginning to think that I am not doing what is good for me but what is good for others.
I'm sorry for you. New guys need to realize the risks that come with all of this. You could lose it all and you could win it all. It goes both ways. Second, what works for A may not necessarily work for B and you should not be a bandwagon investor.
Always find out more in depth before putting your money somewhere or, even better, hire the services of an expert (so you give little margin for error and get investments to suit you). I made my first million earlier this year this way after much trial and error. Good luck!
@@MIchaelGuzman737 Please who is the expert that assist you with your investment and if you don't mind, how do I get in touch with them?
Funny enough, I can honestly relate. It's not as easy as it may sound and requires some sacrifices but it is definitely rewarding. I don't know if I am permitted to go into details here, but her name is "JILL MARIE CARROLL". Was in the news a lot in 2018. You may look her up for more.
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wow.. amazing to see others who trade with Mrs Katherine Flores, i'm currently on my 5th trade with her and my portfolio has grown tremendously.
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With the consistent weekly profits I'm getting investing with Mrs Flores, there's no doubt she is the most reliable in the market. such a genius
she often interacts on Telegrams, using the user below.
Like Warren Buffet said, dividends are only good if the business you’re investing into can’t make good use of that capital. So if you’re trying to invest into businesses with actual growth, looking at dividends is a waste of time. Why are you investing into a company if they’re returning capital to you because they think you can make better use if it than they can. It’s not much different from bond investing. The way I see it if you have a $1 million at some point, that’d be enough to create a portfolio that would pay you between 50k-70k in dividend income...
It's not difficult, but you have to learn and handle. Another thing is that if you can't manage your home, maybe you shouldn't invest on your own. If so, you should hire a CFP to help you diversify your assets to include ETFs/index funds/mutual funds and stocks of companies with consistent cash flows, rather than betting on penny stocks.
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@@kurttSchuster Over the following 3 months, I want to increase my reserve from $280,000 to at least $550,000. I would be grateful for any advice you can give on how to accurately predict the market and how to diversify and balance my portfolio in order to accomplish my goal.
@@tonicruger I really don't like making such recommendations, because everybody's situation is unique. But there are many freelance wealth managers you could check out. I have been working with "NICOLE DESIREE SIMON" for about four years now, and she's really, really good. If she meets your discretion, then you could go ahead with her. I endorse her.
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Finally my favorite RUclips channel has posted a new video 🎉
Thanks 😁
Your trading mindset and approach to the trading game & the thinking process is just awesome..keep going miles ahead..👍
fantastic knowlange, thank you!
Glad it was helpful!
This channel is gold hidden in youtube algorithm.
Thanks 🙏
Superb explanation thank you!!
Thanks for watching Noel
Excellent thanks
Great video, thanks as always.
Your videos are incredible. Thank you.
You're very welcome!
Hi @@FinancialWisdom, in the two months since I left my original comment, I watched virtually every one of your 90+ videos.
I was a financial advisor and nursed clients through 2008. At the time, I focused on fundamental analysis (I even came up with something similar to the Piotroski on my own), and encouraged clients to hold for the long-term.
Sadly, many of them simply could not take the pain, and against my advice, they would sell. Demoralized at not being able to protect clients from their own (understandable) emotions, I left the industry several years ago.
You have now opened my eyes! I will be joining your community (and purchasing your PDF). If I decide to re-enter the investment business, I will contact you for some 1-1 consulting (assuming you are amenable).
All the best, hope your 2024 is starting off right!
Best Video Yet!
As always, another solid video with sound advice. I have actually performed this exact back test previously and found it to perform reasonably. Like all timing models, it suffers during periods of consolidation. A similar approach that involves the MACD indicator applied to the SPY using the weekly chart and settings of 12/25/9 will out perform the 10/20 EMA as described in this video. I encourage you to back test both options and choose the approach that works for you.
Thanks. Yes I use it for trading windows as opposed to a stand alone approach.
Hey. What do you mean by trading windows exactly?
@@jasonstazm When the S&P 500 index has its 10 Ema Above the 20 EMA, you can then apply you long trading strategy
Ok thanks. Still in the US championship?
I just did a back test on tradewell app. This works only on certain time frames. If you back test all the way to the early 90s, buy and hold worked better. Also the COVID crash basically negates this strategy's benefits over buy and hold if you are doing this on the weekly level as it would have you selling at near the low and buying back when the market bounce back was nearly complete. You also did not explain the trading windows very well. This works OK as a sell signal but it has too much lag for timing the bottom. If the markets are going sideways, as it appears to be doing now, it probably will underperform either buy and hold or simply staying in case.
Its all about the trading windows. Also dont forget if you are looking from a standalone approach on the index you need to factor in drawdown too
Hey, what happened to your beloved weekly MACD trading signal that you used to use with the 10/20 EMA trading window? Looks like you edited out any mention of the MACD. Even so, thanks for the video.
Thanks for this !
My pleasure!
Very simple!!! Thanks a lot!
You're welcome!
Great work... cheers
Many thanks!
Another seemingly simple yet practical strategy.....thank you sir
Thank you
Hi, First of all thanks for making these videos. Super awesome videos and they just cut the noise. I am a full time trader and your channel helped me become better in my portfolio management. I purchased your strategy ebook prior to the updation (like few weeks before, if not days). Do I need to buy the strategy pdf again?
Excellent video, kudos! Sitting passively in a deep, protracted drawdown is painful for most investors and unacceptable for many. Any way to avoid it should be thoroughly investigated and evaluated.
EMA crossovers are great when the markets are trending up or down but when the markets are choppy (moving sideways), it will generate a lot of false signals.
That is why I use them for trading windows and not trading signals, big difference. But yes you are correct👍
@@FinancialWisdom Hai what does it mean trading windows and trading signals dear
@@prabu5053 A trading window is a period of time in which you can apply your strategy, this could be for 6 months for example. The signals are the buys and sells within the trading window from your strategy
Thank you
Hi Gareth do you mind to share the exact parameters used for the backtest as of 6:23 on the video? I can't emulate such a high growth... my simple backtest only returns 282%. Any other rule apart from the 10/20 EMA and the 12% trailing stop?
Well done.
Thanks
Thanks friend
Thank you!
Hey Mister! Thanks again for sharing this amazing content.
My pleasure!
Amazing video!!!
Thank you!!
I was in a search for entering and exiting conditions for QQQ.
I can not swing trade (due to high commissions of being a foreign investor). I look for positional trading strategies that would make me take action 2-5 times a year mostly.
That's spot on content that I was searching for.
I'll be subscribing to your paid content when I find free time to check out what is offered. Your approach fits to what I look for perfectly.
Great to hear 👍
@@FinancialWisdom Will you have any black friday deals? 😅
Btw, these type of MA crossover strategies are great on big trends as you shown.
However, in my backtests, it slowly eats the capital during the sideways markets since it enters high and exits low in a short period of time (buying local tops, selling local downs). Do you have a strategy to avoid that?
Your videos are a goldmine
Thanks 👍
Great Video thank very much.
You are welcome!
Just because a stock/crypto is going up doesn’t mean it’s a good investment. just because a stock is going down doesn’t mean it’s a bad investment. theres more to a stock than just its stock price. An entire company more. focus on the company, not just the stock price or the bitcoin price, I trade and hold profits keep up the great work! and also Nate FLINT has been doing a great job reviewing all chart, trade and techniques on BTC which has enhance the growth of my portfolio to 17 BTC lately.
He is also my personal trader, crypto analyst and account manager. With an initial invested capital of 3 BTC, it generated a return of over 8 BTC within 3 weeks of trading. I was really impressed with the profit made.
Simple step-by-step process, excellent communication and response times. The service was extremely streamlined and friendly throughout. Would recommend them to anyone give him a reply
Much inspired by this , can you share helpful info on your advisor? I am looking to make a change on my finances as well.
HE IS ON TELEGRAM.S...
Nateflint
Very good video!
Thank you very much!
Thank you sir
Thank you...
Great insights..any time frame ??? Suited for scalping??
Depends on your style really.
Generally if EMA 9 crosses SMA 20. This is trending pretty good.
an ideal entry at this point is when price retraces to the SMA
trade on trend to last high or low and it will probably go further.
The win rate on this is completely nuts. Not a slam dunk. but really high.
which timeframe? weekly?
@@gordonetgateany really. just keep in mind that the time frame you are on dictates time in trade, tolerance for drawdown, and pips to gain potential.
I generally like to use H1, M15, and if i want to make a fast pizza M5. I like to be in and out of trades quicker and pick up more of the bounciness of the bigger moves.
The principles are the same no matter what the time frame.
You want to see the trend... not consolidation. a nice lightning bolt not a sin wave.
Where are you able to backtest EMA strategies exactly? Many thanks for your excellent videos, found you after discovering risk on risk off from MA.
This is great man. Indeed january provided great breakouts that worked at least for a short period of time.
I have been using ibd market direction to press or release the gas but i have no way of backtesting it since its also discretional.
Love your videos
Thanks!
Thanks, that was very simple and helpful.
You're welcome!
So where do you get those programs at to run those charts??
Very good filter FW!
Thanks Cagri
How was leverage obtained? How do you define the Trading Window edges? What are the entry exit rules in the trading window? How were they determined?
👍Agreed about lost opportunity-cost. Not only financial, but also from holding back on new investments -- owing to the psychological loss of risk tolerance on the already-open losing trade.👍
This is one of those videos you want to save and re-watch occasionally. This plus the 10 month moving average are so simple and yet so effective.
Ya, that's wht i am using now.
which video has the 10 month moving average can u provide me the link pls .... thank u!
@@debanjanbaidya9383 It's called "Best Trading Indicator To Build A Strategy Upon (100 Year Back Test!)", from 3 months ago.
@@TheMountainBeyondTheWoods i saw the video you mentioned, so you check short term moves with a 10/20 EMA crossover on weekly timeframe, and also check on monthly time frame with a 10 moving average, is that right?
Since you added EMAX-over to your strategy, do you think it's worth combining MACD and EMAX-over as indicators and entry/exit points for BTC trades?
Gareth, do you think that you prefer this strategy over the 10 Month line on a monthly chart? I know you did a video about that strategy before. Which one rules?
I love these videos! This one especially. Excellent! I've not seen any recent videos. Are you still producing?
What are your thoughts regarding EMA vs Hull MA? Would the HMA be as or more effective using the methods you describe here?
How well do you think this can be applied to individual securities?
Many thanks!
I love this guy
Thanks Rick 😊
i love it
looking at the graph at 4:57 currently
between 2003 and 2008 there were about 5 crossings to exit and re enter.
not just the one before the crash, seems that you have to thinkabout it more carefully then just check for crossings.
Hello, great video. You mentioned to use it on the S&P 500, can the same principle be used in conjugation with other counties financial markets? Example FTSE100 or CAC in France?
Only newbies will take this as true advice. Life is not that simple nor is Trading or Investing
The King
I calculated this method on an S&P 500 ETF for September 2020 until March 2024. EMA 10/20 only achieved 90% of the final amount of a buy and hold strategy. Better was a WMA 3/6 strategy with 96% (lot more sell and buy actions), but yet underperformed to the buy and hold strategy. And this is without any costs for buying and selling.
I don‘t know. Maybe this strategy only works when you are really hitting those bear markets like 2008/09 for months or even years. But applying this strategy in a bull market doesn’t seem to work. You sell when small corrections happen at a low price and buy at a higher price back for no gains. But since this stratgey is ought to protect you from getting hit by a bear market, you would need to apply it constantly. But then you lose out performance. It is always simple to retroactively look at a chart and say that you would have avoided months of decline. But when you don’t know that such huge setbacks will happen, this strategy costs you money in uptrending or sideway markets obviously.
I started trading with this crossover. It works great on trending stocks.. Best for swing trading. And MA crosses shows us the risk reward ratio as well. 👍
Do you swing trade with weekly bars?
@@timgoes Daily bars. It works on all higher time frames. The hardest part is sticking to the same strategy with discipline, and money management..
Good stuff
John Murphy's 13/34 ema on weekly chart is the go to ...
I like this one and the other one on the 200 ma as well.simple and yet a lot of people,don’t do it. I started with the better ETF as well
Thank you for the video. I use ema crossover in crypto. The 10 and 20 ema can give choppy signals sometimes when the market is moving sideways. You can change it to 13 and 48.5 you'll get later and fewer signals and it eliminates more choppiness
Sure, every asset behaves differently - A diversified fund of 500 stocks like the S&P would be less choppy by nature, but remember this is for trading windows not necessarily a catalyst for buy and exit signals itself
Sounds like some one else picked up on the ETF optimization back test
Another superb video. Thank you!
Glad you enjoyed it!
Great stuff again! Appreciate your work very much. Thank you!
Just a question: If we look at the chart shown at around 4:53m there are a lot of more crosses (e.g. up in spring 2002, down in autumn 2004). How do you deal with them and why are they not recognized in your trading windows?
Hi Michael - The back testing results do include all the crosses, however for simplicity on the chart I wanted to show the bulk of the trends. In real life, for my strategy, if there were perhaps 2/3 weeks where the 10 crossed below the 20 i would simply not make any new trades. The main benefit comes from the prolonged drawdowns. Hope that helps
Looks like a simple variation of the Oliver Kell trading strategy video you made a year ago
One perhaps silly question, do you think this strategy could be used for day trading?
I use the 10/20 Ema crossover on the 15 min chart for entries once price gets to a key level to go long or short. Try it and thank me later
super educational video as always
Glad you enjoyed it
FWIW an ETF focused site (now defunct) did an optimization back test on SPY and calculated that the optimal MAs are (were) 13 and 48.5 daily.
Thanks Bill. I use the weekly charts far less choppy.
Interesting video! what about the 200 day SMA strategy which works well too?, as you stated in your other video. Which strategy works best?
This suits my personal strategy better in regard to 'trading windows'
This is my strategy i use on stocks. 10/20 ema weekly crossover. Super simple and works amazing on momentum stocks.
Good stuff!
How much are you out performing the 10/20 indexes method by?
How did the EMA crossover do when compared to the MACD FANG strategy.
what is the best time frame to use the 10/20 ema crossover technique
How does this compare to your other video suggesting 200 DMA end of month status decisions?
Loved your video just one question... Which software do you use to backtest...
www.marketinout.com/?a=gapa
Hi Gareth!! Great video. One question though. You talked about using a 12% trailing stop. Out of curiosity, what event do you use to re-enter the market after you move to cash when the 12% trailing stop is triggered? Thanks for the great content!! Subscribed. Dan
Sorry for the previous spam message ! I think I replied in email to you 👍
10/20 EMA Crossover with MACD ?? or only the crossover on weekly chart?
Absolutely fascinating. Many thanks Gareth. Have you done any comparisons of the weekly 10-20 EMA crossovers with the weekly MACD crossovers?
Thanks William, I have done to some degree. They work well together. The MACD for medium term momentum and the 10/20 EMA for a longer term perspective (windows).
@@FinancialWisdom Thanks, Gareth. Useful to know. Especially when considering leverage.
Great strategy !! Did you try adding a filter of all time high with this EMA filter?
Hi Tejas - No but it is part of our stock scoring system
First, let me say that I greatly appreciate your extremely informative and straightforward videos. I love how you highlight the various strategies including the 10/20 EMA Crossover with detail and precision. While I won't split hairs as others have done as to whether back tests truly show outperformance of the 10/20 EMA vs Buy and Hold, I DO think clarification is needed about the "trading window" vs "trading signal" box you let yourself get put in by some of the commenters.
The video clearly implies that the strategy can be used solely for trading signals or in combination with other strategies such as a 12% trailing stop. Sure, the video also mentions using the 10/20 EMA to identify Trading Windows. But your replies to various comments say that you ONLY use the 10/20 EMA Crossover to show trading windows and NOT for trading signals. Exactly why is that? Are you therefore saying that traders who want to keep it simple can't or shouldn't use just the 10/20 EMA for trading signals? If so, why mention it in the context of entries and exits in the first place?
All that said, I love the simplicity of the strategy, whether for trading windows or trading signals. The importance of avoiding portfolio crushing drawdowns cannot be emphasized enough. Especially for those who may not have the time or desire to wait years for breakeven. The last thing such investors or traders want is to be Trapped Buyers.
Finally, how does you MACD strategy fit into all this? Much interested in your reply to these fair and reasonable questions. Thanks.
Change those parameters to 50/200 and apply the trading rule to a diversified portfolio of markets across asset classes, and maybe then the rule can show some profits.
However, if you want to go broke fast, apply the 10/20 cross to a single market… don’t believe me? Backtest it. Sure, it may show that it worked on apple, for example, but how would you know to trade apple in the first place (survivorship bias)? Instead of the 1000 other tech companies that went to zero. Think about it.
Applying these trend trading rules to a single market or even a handful of stocks is analogous to gambling. How do professional trend followers and CTAs trade? Hint: diversification across asset classes is KEY. The rules themselves, that is, the specifics (crossover or price breakout etc.) are largely irrelevant, all these rules accomplish the same thing - they jump on trends and ride them.
I highly recommend a book called “stocks on the move” by Andreas Clenow. He explains this concept with hard evidence/backtests so much better than I can here.
Keep the discussion going, this is good.
Would you combine this willth the 200dma trade onve per month rule as a mean to react faster (say uoure on the middle if a month)
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Can I use the 10 and 20 EMA crossover on daily charts instead of weekly charts?
Is it possible to automate the 10/20 EMA cross strategy using a service? Or do you need to do this yourself with some coding using Trading View for example? Would like to use it for trading crypto.
i trade 30 yrs now 10-20 crossover on hourly is best ever
Tx for a very informative video. Is there any reason why you don't short indexes or shares?
I prefer to stay with the longer term market bias, I try to keep everything stacked in my favour
Thanks for the reply
Do you trade commodities with this method as well?
what platform are you using for your graphs?
Could u apply this on trading futures market es ?
We want more videos bro... Please make regular videos at least a video per week 🙏
It's easy to see the crossovers if you use a charting program and select the MACD indicator with parameters (10,20,0). The result will show you a histogram of when and how far the 10 EMA is above the 20 EMA. But be aware, using this to make money isn't as easy as it seems.
Thanks Peter - You are right, as a standalone approach its not wise.
Great video, is there a similar strategy for trading crypto? Or the best strategy is the video with daily and weekly MACD?
The dual MACD is the one I use
My biggest gripe with value investing was the huge drawdowns, maybe this can be implemented to help reduce the losses.
Absolutely
can you do one on how UPRO would have performed using the 20/10 along with the 15% stop loss method? I feel like it would have beaten just about everything else.
I wonder if the backtesting software assumes the model trades intra-week or at the weekly close. If it’s intraweek then the software might be giving you a rosier output than real world
The close of the weekly candle
@@FinancialWisdom Does the back test trade at the weekly close, or at the next weekly open (Monday open)? I've done analysis like this before and Monday open would be a better analysis (and more accurate) since it's near impossible to trade at the close from a practical viewpoint.
How do you draw the trading windows?