If you are looking for your first backtested NSE strategy, start here. The EMA 9/21 Crossover is simple enough to understand in 10 minutes, has clear mechanical rules that remove emotion, and has been profitable across multiple NSE market cycles when applied correctly. It is not glamorous — but it works.
Strategy Summary Card
| Parameter | Setting |
|---|---|
| Indicators | EMA 9 and EMA 21 |
| Timeframe | Daily (end-of-day) |
| Universe | NIFTY 50 stocks, NIFTY 50 index |
| Style | Swing / Positional |
| Trades per year | 8–15 (daily timeframe) |
| Suitable for | Beginners with 30 min/day available |
The Rules — Simple and Clear
EMA 9 crosses ABOVE EMA 21 at end of day
Buy at the open of the next trading day
Exit (Sell Signal):
EMA 9 crosses BELOW EMA 21 at end of day
Sell at the open of the next trading day
Stop Loss:
Place stop loss 2% below the entry price
Or use the EMA 21 value as a trailing stop — exit if daily close is below EMA 21
Visual Example of Signals
Typical Backtest Results on NSE (2019–2024)
| Symbol | CAGR | Max Drawdown | Win Rate | Total Trades |
|---|---|---|---|---|
| NIFTY 50 (Daily) | ~16–18% | ~18% | ~45% | ~12/year |
| HDFC Bank (Daily) | ~14–17% | ~22% | ~43% | ~11/year |
| Reliance (Daily) | ~15–19% | ~20% | ~44% | ~13/year |
Note: These are approximate historical ranges. Always run your own backtest on Momentum IQ with current data for precise figures. Past performance does not guarantee future results.
Why the Win Rate is Only ~45%
Many beginners are surprised that a successful strategy wins less than half its trades. This is normal for trend-following strategies. The key is that winning trades are larger than losing trades — the strategy lets winners run and cuts losers quickly. Average win might be 8% while average loss is 3% — giving positive expectancy despite a below-50% win rate.
Improving the Basic Strategy
Once comfortable with the basic strategy, add one filter at a time and backtest the improvement:
- ADX filter — only trade when ADX > 25 (trend is strong enough)
- Volume filter — only buy when crossover happens on above-average volume
- Sector filter — only buy stocks in sectors with positive momentum