Dual DEMA Crossover Signals with Stops and Profit Targets
Summary
This document describes a trend-following system that compares two configurable double exponential moving averages (DEMAs). A cross of the faster line above the slower line signals a long entry, while a downward cross signals a short entry. An optional third DEMA can filter signals by its direction; when it is disabled, the system uses the two-line cross, with fallback logic for other parameter combinations.
The script also includes fixed percentage stop losses and profit targets, with an option to trail stops as prices move favorably. Its settings include separate long and short risk levels and a date range for trading. The published backtest configuration identifies BTC/USDT futures and its test interval, but the document provides no performance statistics, so it does not establish profitability. It warns that crossover systems can produce repeated false signals in non-trending markets and suggests tuning periods or adding filters. Results would depend on instrument, timeframe, costs, and implementation details.
Key ideas
- A faster DEMA crossing above a slower DEMA creates a long signal, while a downward cross creates a short signal.
- An optional third DEMA can confirm a signal through its direction of movement.
- The strategy supports fixed stop and target levels, as well as an optional trailing stop.
- Crossovers may whipsaw in range-bound markets, and parameters require instrument-specific evaluation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.