Dual EMA Trend Following with Range and Volatility Filters
Summary
This strategy combines high-price and low-price EMAs with range detection and an ATR-as-a-percentage-of-price filter. It takes a long position when price is above both EMAs and a short position when below both, while pausing during confirmed consolidation or low volatility. A trend-state rule limits entries to one trade per direction until the trend changes. The document also describes ATR-based or percentage stop losses, optional Parabolic SAR trailing stops, and visual markers for consolidation zones.
No performance results or supporting backtest evidence are provided. The described risks include delayed response to reversals, long periods without trades in sideways markets, sensitivity to market-specific parameters, slippage during sudden price gaps, and dependence on technical indicators. The document proposes higher-timeframe confirmation, adaptive settings, volume checks, and other refinements, but presents them as potential improvements rather than validated results.
Key ideas
- Price relative to high-price and low-price EMAs determines the strategy’s directional signals.
- Range and ATR-percentage filters are intended to keep the system out of consolidation and low-volatility conditions.
- A trend-state rule allows one trade per direction until the trend changes.
- Stops may use ATR, a fixed percentage, or an optional Parabolic SAR trail.
- The document gives no performance evidence, and highlights reversal lag, parameter sensitivity, and gap risk.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.