How to validate EMA Crossover PCO or NCO state and next candel validation?

General
1

Hi everyone,

I’m working on an EMA crossover strategy in Python and need some guidance on validating trade states.

My questions are:

  1. How can I correctly identify whether an EMA crossover is in PCO (Positive Crossover) or NCO (Negative Crossover) state using candle data?
  2. Once the crossover is confirmed, what is the proper way to exit the trade on the next candle?
  3. Should the crossover validation be based on previous candle close vs current candle close, or is intraday candle data sufficient?

If possible, I’d really appreciate a Python example or logic explanation for handling crossover state validation and next-candle exit logic.

currentlly using pine script and working as expected how to do same in python ?

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2

Hi @mahendra.beit ,

  1. PCO / NCO crossover condition
# PCO: Price crosses above EMA (prev below, current above)
PCO = (current_candle['close'] > current_candle['ema']) and (previous_candle['close'] < previous_candle['ema'])

# NCO: Price crosses below EMA (prev above, current below)
NCO = (current_candle['close'] < current_candle['ema']) and (previous_candle['close'] > previous_candle['ema'])
  1. Exit logic (rephrased)
    You can handle this through your exit conditions by adding a time-based exit, for example:
exit_condition = candle_time > status['entry_time'] + datetime.timedelta(minutes=5)
# This forces an exit within the next 5 minutes (i.e., the next candle on a 5-min timeframe)
  1. Crossover validation
    Yes — crossover confirmation should always be done using both the previous candle and the current candle (not just current candle alone).