The strategy uses moving average cross-over to detect an early change in momentum. Specifically, we get a signal to go long when the EMA 12 crosses above the EMA 36. Similarly, we get a signal to go short when the EMA 12 crosses below the EMA 36. The ADX indicator helps us to gauge
the strength of the momentum. We set the 40 level as a benchmark, as any value above 40 indicates that momentum is very strong. Once the ADX crosses above 40 and comes back below, it is telling us that the momentum is losing steam and it ’s time to exit the trade.