Hi Popov
Yes, when I used automated triggering it also let me down. Thanks for the tests however.
Just a reminder to anyone who missed this paragraph in the original post.
Has worked for me a number of times however care has to be taken since the lines can cross back and forth without any real profit. So automated trading with this is out. You have to wait a few candles or use other indicators to be sure it is a strong trend starting when the lines cross. I guess in theory it might be better on longer time frames (it is interesting to see the cross overs increase the shorter the timeframes get).
Also I'd guess the volatility of GBP/USD recently doesn't lend itself to this approach.
That said I have found that different measurements for the EMA values also helps.
For example I heard from another that:
EMA(10) Short
EMA(40) Long
Is a good indicator for bearish conditions (newbies: that's a falling chart line [sell])
Also as mentioned in some of the replies the trick is to work out what EMA values suit the currency pair you're trading.
If you get lots of small crossovers (the ones that cross money) then you need to play with the values to smooth them out. The shorter value shows short trends and makes the system more sensitive as it follows the spikes to a closer degree. The longer value shows longer trends. To get a safer system you might increase the shorter value to a higher number. In theory they'd cross less. Or increase the timescale, they'd increase less too. Also remember to use other indicators to confirm your guesses as to if the trend will be a short one or a profitable long one.
Popov your tests are great. If you can easily do them perhaps you could IM me and we'll try some automated tests with different values to see if the base system can be adapted for better automated trading.
However as it was presented in the original post it does not suit automated trading. It was/is only to help aid your own reasoning/decisions. Another tool for trading. Traders should find the EMA values that work for them and their favorite currency pair. Watch this space however, if Popov contacts me and we can figure out the EMA values that would work for automation then I/we will post them here.
Best Wishes,
Matt