A DEMA Crossover Trend Strategy with Stops and Profit Targets

Summary

This trend-following system uses a fast and slow double exponential moving average (DEMA) to generate directional signals: a cross above prompts a long entry, while a cross below prompts a short signal. A third, configurable DEMA can filter crossovers by requiring it to rise for bullish signals or fall for bearish ones. The strategy also describes fixed percentage stops and profit targets, with an optional trailing stop that follows price.

The document lists an 8-period fast DEMA and a 24-period slow DEMA as defaults, along with configurable risk settings. Its BTC/USDT futures backtest covers a short period and provides no outcome statistics, so it does not establish profitability. The text warns that crossover lag can hurt in fast markets and that sideways conditions can create repeated signals; fees and slippage may also affect results. The source contains substantial alerting and chart-display code, and its conditional logic determines whether the third-line filter is active, so implementation details should be checked against the intended rules.

Key ideas

• A fast DEMA crossing a slower DEMA supplies the main trend-following signal.
• A configurable third DEMA can filter signals according to its direction of change.
• The strategy offers fixed percentage stop and target levels, plus an optional trailing stop.
• Crossovers can lag and generate repeated false signals in sideways markets.
• The published test settings do not include results that demonstrate the strategy's performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.