Estrategia Cava - Indicador

Simplified Criteria of the Cava Strategy

Below is the logic behind the Cava strategy, broken down into conditions for a buy operation:

Variables and Necessary Data
EMA 55: 55-period Exponential Moving Average.

MACD: Two lines (MACD Line and Signal Line) and the histogram.

RSI: Relative Strength Index.

Stochastic: Two lines (%K and %D).

Closing Price: The closing price of the current period.

Previous Closing Price: The closing price of the previous period.

Entry Logic (Buy Operation)
Trend Condition (EMA 55):

The price must be above the EMA 55.

The EMA 55 must have a positive slope (or at least not a negative one). This can be checked if the current EMA 55 is greater than the previous period's EMA 55.

Momentum Conditions (Oscillators):

MACD: The MACD line must have crossed above the signal line. For a strong signal, this cross should occur near or above the zero line.

RSI: The RSI must have exited the "oversold" zone (generally below 30) and be rising.

Stochastic: The Stochastic must have crossed upwards from the "oversold" zone (generally below 20).

Confirmation Condition (Price):

The current closing price must be higher than the previous closing price. This confirms the strength of the signal.

Position Management (Exit)
Take Profit: An exit can be programmed at a predetermined price target (e.g., the next resistance level) or when the momentum of the move begins to decrease.

Stop Loss: A stop loss should be placed below a significant support level or the entry point to limit losses in case the trade does not evolve as expected. The Cava strategy focuses on dynamic stop-loss management, moving it in the trader's favor as the price moves.

In summary, the strategy is a filtering system. If all conditions are met, the trade is considered high probability. If only some are met, the signal is discarded, and you wait for the next one. It's crucial to understand that discipline and risk management are just as important as the indicators themselves.