Dual TEMA Crossover for Trend Following

Summary

This document describes a trend-following strategy that compares a faster and a slower triple exponential moving average (TEMA). Each TEMA is formed from three successive exponential moving averages, combined to respond more quickly to price changes than a basic moving average. The example uses periods of 20 and 60 days.

A long position is opened when the faster TEMA is above the slower one and closed when it falls below; the accompanying source leaves short entries disabled. The document explains that crossovers may suit clear trends but can produce repeated losing trades in sideways or sharply swinging markets. It recommends controlling position size, using stops, and considering additional filters. It provides no reported performance results, and its brief backtest settings identify BTC-USDT futures over a limited 2023 period, so they do not establish profitability or robustness.

Key ideas

• A fast and slow TEMA pair provides the strategy’s trend direction signal.
• The described entry condition is a fast-line crossover above the slow line, with an exit when it crosses below.
• The source implements long trades and leaves short entries commented out.
• Sideways markets can generate repeated false signals, while moving average lag can delay entries and exits.
• Stop losses, position sizing, added filters, and parameter testing are suggested risk controls.

Tags

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