Averaged Multi-EMA Crossovers for Trend Following
Summary
This trend-following method averages two groups of exponential moving averages to create smoother short- and long-term trend measures. The short group uses periods 3, 5, 8, 10, 12, and 15, while the long group uses periods 30, 35, 40, 45, 50, and 60. A cross above the long-group average opens a long position, and a cross below it opens a short position. The described trade management uses a 10% profit target and a 5% stop level.
The document provides published backtest settings for BTC/USDT futures on daily bars from late 2019 to late 2024, but reports no outcomes, so it offers no evidence of profitability. Its main caveats are moving-average lag, whipsaws in ranging markets, and fixed exits that may not suit changing volatility. The strategy description is also simpler than the source mechanics: exit orders recalculate target and stop prices from the current close, which may affect how the stated percentages behave in practice. Suggested extensions include volatility-aware exits, volume confirmation, and filters for trend strength.
Key ideas
- Averaging several short and long EMAs creates two smoothed trend measures.
- Crossovers between the short-group and long-group averages determine long and short entries.
- The document specifies a 10% take-profit and a 5% stop level for each trade.
- Moving-average lag and ranging-market whipsaws are central risks.
- Published backtest settings are included, but no performance results are reported.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.