CBC Candle Break Reversals with an EMA200 Trend Filter

Summary

This document describes a trend-following system that tracks whether the close has broken the previous candle’s high or low. A change in that state creates a bullish or bearish reversal signal. An optional EMA200 filter allows long entries above the average and short entries below it; the strategy also specifies percentage-based profit targets and stops, and offers commission settings for backtesting.

The document gives a published backtest configuration for ETH/USDT futures on Binance over a limited period, but reports no performance results. It warns that repeated false breaks in sideways markets can produce losses, the EMA filter may lag trend changes, and fixed percentage exits may not suit different volatility conditions. It also flags sensitivity to exit parameters and unclear handling of repeated signals. Suggested extensions include volatility-based exits, higher-timeframe and volume confirmation, and drawdown controls; these are proposals rather than demonstrated improvements.

Key ideas

• A bullish signal occurs when the close breaks above the previous candle’s high and changes the tracked state to bullish.
• A bearish signal occurs when the close breaks below the previous candle’s low and changes the tracked state to bearish.
• The optional EMA200 filter restricts long and short trades according to price’s position relative to the average.
• The stated framework uses percentage-based profit and loss exits and supports commission modeling.
• The document provides a backtest setup but no results, so it does not establish profitability.

Tags

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