Dual EMA and RSI Signals with ATR Profit Targets

Summary

This short-term system combines fast and slow exponential moving average crossovers with an RSI direction filter. It opens long positions when the fast average crosses above the slow average and RSI is above its midpoint, and opens shorts on the inverse conditions. ATR sets a stop and two profit targets: the first target closes half the position, while the second is intended to close the remainder. The code excerpt uses a 14-period ATR and exposes stop and target multipliers as parameters; it also plots signals and provides alerts.

The document explains that volatility-scaled exits can widen or tighten with market movement, but it supplies no backtest settings or performance results in the available text. It warns that short-period crossovers may reverse repeatedly, parameters may behave differently across markets, and small ATR values can make stops vulnerable to ordinary price movement. Gaps, low liquidity, and trading costs are also concerns. Suggested additions include session and longer-term trend filters, dynamic sizing, and drawdown controls. The strategy description and code excerpt do not establish that these changes improve outcomes or that the listed exits behave as intended in every execution scenario.

Key ideas

• EMA crossover direction is confirmed by whether RSI is above or below 50.
• ATR sets volatility-scaled stops and two profit targets for both long and short trades.
• The first target is designed to close half the position, with the second targeting the remaining half.
• Fast crossover signals can whipsaw, and small ATR readings may produce stops that are too close.
• The document suggests testing filters and sizing controls but provides no results demonstrating strategy performance.

Tags

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