Building and Backtesting a Buy-Sell Model with Close Prices and EMAs Buy-Sell models are among my favorite analytical techniques because they simulate what traders do on a regular basis – namely, buy and sell securities. However, no amount of backtesting is enough to guarantee how well a buy-sell model reflects actual market performance. This is because publicly traded financial security prices are driven by diverse factors that can change over time. Nevertheless, buy-sell models can offer useful guidelines for buying and selling securities when current market conditions are similar to previously backtested market scenarios. EMAs are another of my favorite analytical tools for modeling the behavior of security prices. EMA is an abbreviation for an exponential moving average. However, an EMA is really not an averaging technique. Instead, EMAs are a smoothing technique for time series data. The period, or more precisely period length, of an...