Dynamic EMA Pullback Strategy with Candle and Speed Filters

Summary

This trend-following strategy combines a variable-speed EMA with conventional short- and long-period EMAs. Its dynamic EMA adjusts its smoothing in response to recent price changes; entries require price to remain on the trend side of that line, stay within a pullback-distance threshold, and align with the conventional EMA trend filter. A multi-candle reversal pattern and a strong candle body in the trend direction provide further confirmation.

Exits use an ATR-multiple stop and a fixed percentage target. The accompanying description gives a BTCUSD hourly example and reports a profit factor for a stated historical period, but these figures are presented without trade counts, comparison benchmarks, or independently verifiable results. The script’s default position sizing and the accompanying description’s stated risk assumptions also differ, and the speed thresholds are described in ticks while the code compares them with the raw close-open price difference. The settings are therefore market dependent and the reported outcome should not be generalized.

Key ideas

• The dynamic EMA changes its responsiveness based on price movement and an acceleration factor.
• Long and short entries require trend alignment, a limited distance from the dynamic EMA, candle confirmation, and a speed threshold.
• The strategy uses an ATR-based stop and a fixed percentage profit target.
• The document reports a historical BTCUSD example, but provides limited information for assessing robustness or reproducibility.
• Speed thresholds and sizing assumptions require careful interpretation and market-specific calibration.

Tags

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