ATR Trailing Stops with an EMA Regime Filter

Summary

This strategy combines a volatility-scaled trailing level with an EMA direction filter. On each bar, it places candidate stop levels one ATR multiple below or above the close. In an uptrend, the level ratchets upward; in a downtrend, it ratchets downward. A close crossing the prior level changes the trend state. The strategy considers a long entry on an upward flip when price is above the EMA, and a short entry on a downward flip when price is below it. The stated defaults use a 14-bar ATR, a 2.0 multiplier, and a 200-bar EMA.

The explanation presents the EMA as a way to reduce countertrend signals in choppy conditions and discusses how ATR length, multiplier, and EMA length affect responsiveness. It provides no backtest statistics or evidence that the filter improves results. There is also an implementation caveat: the script submits entries on qualifying flips but does not place explicit stop-exit orders, so the described stop-based trade closure is not directly coded; exits or reversals depend on later qualifying entry signals and the platform’s strategy behavior.

Key ideas

• The trailing level is based on the close plus or minus an ATR multiple and ratchets in the direction of the trend.
• A close crossing the prior trailing level flips the strategy’s trend state.
• Long and short entries require both a flip and price on the matching side of the EMA.
• ATR length and multiplier affect how quickly the trailing level responds to volatility and price changes.
• The script has no explicit stop-exit order, and the document reports no backtest results.

Tags

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