DAX 5-Minute Trend Strategy Using DI, TEMA, and a Tightening Trail
Summary
This strategy trades the DAX on five-minute bars, opening positions during a specified morning window. Long entries require TEMA to turn upward while smoothed Directional Indicator values rise from below zero; shorts use the inverse conditions. It limits opening to one trade per day and uses a price-based stop with a trailing exit. After a trade has lasted 12 bars, the trailing distance is reduced according to a stated factor.
The author reports favorable results over 100,000 bars with a five-pip spread, but says comparable tests on other indices and timeframes did not perform as well. The strategy is exposed to the market for at least 65% of the time, including overnight, and the author estimates financing costs as part of the spread assumption. Settings that worked for 2019 differed from those used for the longer sample, motivating a request for automatic adaptation to changing market conditions. No performance statistics or independent validation are provided, so the reported results should be treated as limited backtest evidence.
Key ideas
- Long entries combine an upward TEMA turn with a rising DI value below zero, while shorts use the reverse setup above zero.
- Entries are restricted to a morning time window and at most one trade per day.
- A price-based trailing stop tightens after 12 bars in a position.
- The author reports favorable DAX five-minute results but not comparable results across other indices and timeframes.
- High time in market, overnight exposure, financing assumptions, and sensitivity to year-specific settings are stated limitations.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.