EMA + OBV Volume Confirmation Strategy

How the strategy works

This template gives you a starting point. Backtest it with historical data, review the trade log and adjust one setting at a time.

Example entry rules

1. Use EMA 20 above EMA 50 for long direction and EMA 20 below EMA 50 for short direction.
2. Require OBV to be above its 20-period smoothing line for longs and below it for shorts.
3. Require both EMA direction and OBV confirmation on a completed candle.

Example exit and risk rules

1. Apply the selected stop-loss and take-profit protection.
2. Exit on the opposite EMA crossover when applicable.
3. Auto-close when overnight holding is disabled.

Always test with realistic slippage, spread, position size and daily loss limits.

Potential advantages

• Uses EMA for direction and a second indicator for confirmation
• Filters some weak EMA signals
• Ready for historical testing before paper trading

Important limitations

• OBV depends on reported volume quality
• Volume confirmation can lag sudden price reversals
• Backtests do not guarantee future performance