The EMA Crossover is probably the first strategy every trader learns, and for good reason — it's simple, it's visual, and it works reasonably well in trending markets. But "works reasonably well" is doing a lot of heavy lifting in that sentence, and most traders never actually verify it before risking real money.
We ran the 9/21 EMA Crossover on Nifty 50 from January 2024 to December 2025 using MomentumIQ's backtesting engine. Here's exactly what we found.
The Setup
The rules are deliberately simple:
- Entry: Buy when the 9-period EMA crosses above the 21-period EMA
- Exit: Sell when the 9-period EMA crosses back below the 21-period EMA
- Stop Loss: 2% from entry
- Capital: ₹1,00,000, no leverage
No filters, no confirmation indicators, no discretion. Pure mechanical execution — exactly what a backtest is supposed to measure.
What Actually Happened
Over the two-year period, the strategy generated 34 trades with a 41% win rate. That number alone might make you want to close this tab — a sub-50% win rate sounds like a losing strategy. But win rate in isolation is meaningless without looking at the size of wins versus losses.
The winning trades averaged +3.8% while losing trades averaged -1.6%. That asymmetry is the entire point of trend-following — you lose small and often, but the few times you catch a real trend, the gains more than compensate.
Total return over the period: +18.4%. Maximum drawdown: -11.2%. Sharpe ratio: 0.94.
The Honest Take
This isn't a strategy that's going to make anyone rich quickly. An 18% return over two years, after accounting for the emotional toll of an 11% drawdown along the way, is roughly in line with a conservative equity mutual fund — except this one requires active monitoring and discipline to execute every signal without hesitation.
Where it does shine is in trending markets. Strip out the sideways chop of mid-2024 and look only at the trending legs, and the strategy's edge becomes much clearer. The lesson here isn't "EMA Crossover is good or bad" — it's that market regime matters more than the strategy itself.
Try It Yourself
These numbers will change depending on your exact entry/exit timing, the symbols you test, and the period you choose. That's the whole point of backtesting — don't take anyone's word for it, including ours. Run it yourself with your own parameters and see what you get.
Try it yourself: EMA Crossover
Run this exact strategy on any NSE stock with your own parameters.
