ATR-Trailed Trend Signals with Moving Averages and CMO

Summary

This trend-following method builds a moving-average line, with ZLEMA as the default, and places trailing stop levels at an ATR-based distance. It uses CMO-derived movement in the adaptive average calculation and describes three signal families: crossings between the average and the stop line, between price and the stop line, and between price and the average. Users can enable different signal types and set position size based on a chosen risk percentage.

The document warns that enabling every signal may cause excessive trading, and that the price-versus-stop signals can have wider stops and larger drawdowns. It recommends comparing parameter choices and signal combinations across markets. No performance evidence is provided, and the published backtest covers only a short period in Bitcoin futures; it does not substantiate the text’s broad claims about robustness. The source also gives limited grounds for the stated CMO entry-filter description, so that part of the explanation should be treated cautiously.

Key ideas

• The strategy trails an ATR-scaled stop around a selectable moving average, with ZLEMA as the default.
• It defines signal sets from crossings between the average, price, and trailing stop.
• Position sizing can be tied to a selected percentage of equity at risk.
• Using all signal types may increase trading frequency, while price-stop signals may have wider drawdowns.
• The short published backtest does not establish performance across assets or market conditions.

Tags

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