Dual-EMA Pullback Entries with ATR Stops and 2:1 Targets

Summary

This trend-following strategy uses a 10-period and a 50-period EMA to establish direction. In an uptrend, it looks for a pullback where the close is below the fast EMA but the low remains above the slow EMA; a long signal follows when the next bar opens below and closes above the fast EMA. The short setup mirrors these conditions in a downtrend. Stops are placed two ATRs from entry by default, using a 14-period ATR, and profit targets are set at twice the stop distance.

The document explains the rules, lists risks, and provides source code plus a roughly one-month ETH-USDT futures test configuration on two-hour bars. It gives no performance statistics, so the stated favorable risk-reward profile does not establish profitability. The strategy may produce false signals in ranging markets, and gaps or slippage can worsen realized exits. The description also says the stop adapts to volatility, but it is calculated at entry in the code rather than updated dynamically. Suggested extensions include trend-strength filters, larger-timeframe confirmation, and partial position sizing.

Key ideas

• The relationship between the 10-period and 50-period EMAs defines the trend direction.
• Entries follow a pullback and a close back across the fast EMA in the direction of the trend.
• A 14-period ATR multiplied by 2 sets the stop distance, and the target is twice that distance.
• The code uses full-equity sizing and includes a 0.01% commission assumption.
• No performance results are provided, and range-bound conditions, gaps, and slippage can undermine results.

Tags

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