ATR Trailing-Line Trend Signals with Long-Only Entries

Summary

This strategy uses a volatility-adjusted trailing threshold to identify changes in price direction. It multiplies ATR by a configurable reaction factor to set the distance from the selected price feed, then moves the line along with price while limiting its movement according to the prior line value. The source can be ordinary closes or Heikin Ashi closes, and the documented default setup is daily.

A long entry occurs when price is above the line and a one-period EMA crosses above it; a corresponding bearish cross closes the long. Although the script defines bullish and bearish states and labels exits, its order logic is long-only. The document provides implementation details and parameter defaults, but no performance results or comparative testing. Its accompanying notes say it is intended for trending conditions and may generate false signals in sideways markets; no higher-timeframe filter or independent validation is included.

Key ideas

• ATR sets the trailing line’s distance from the selected price feed.
• The line follows price while retaining a ratcheting behavior based on its previous value.
• A bullish crossover opens a long position, while a bearish crossover closes it.
• Heikin Ashi closes are an optional input for signal calculation.
• The document warns that sideways markets can produce false signals and supplies no performance evidence.

Tags

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