A comparison of common automated trading strategies you can build on SFZ Capital â€- from simple EMA crossovers to multi-indicator combinations. Understand the trade-offs and find the right approach for your goals.
Every automated strategy on SFZ Capital is built from combinations of technical indicators and rule-based logic. Here are the most common approaches:
The foundation of most automated strategies. Uses two EMAs of different periods â€- when the fast EMA crosses above the slow EMA, buy; when it crosses below, sell. Works well in trending markets.
Bets that extreme price moves will reverse to the mean. Uses RSI to detect oversold conditions and Bollinger Bands to confirm the price is at the lower extreme. Effective in range-bound markets.
Captures strong directional moves. Uses MACD signal line crossovers for timing, filtered by a longer EMA to ensure trades align with the prevailing trend. Avoids counter-trend entries.
Combines trend, momentum, and volatility indicators. EMA provides direction, RSI confirms momentum, ATR sets dynamic stop-loss distances. More selective but higher conviction signals.
| Approach | Strengths | Weaknesses | Recommended For |
|---|---|---|---|
| Trend Following | Simple, catches big moves | False signals in choppy markets | Beginners |
| Mean Reversion | Frequent trades in ranges | Dangerous in strong trends | Range-bound assets |
| Momentum | High conviction entries | Can miss early trend starts | Stocks with clear trends |
| Multi-Indicator | Fewer false signals | Complex, fewer trade opportunities | Experienced users |
Every strategy approach has market conditions where it thrives and conditions where it struggles. Use SFZ Capital's backtesting engine to test each approach against historical data for your target assets. Always start with paper trading before risking real capital.