Elliott Wave Pattern Entries Filtered by the 200-Day Moving Average
Summary
This strategy combines five-wave Elliott pattern rules with a 200-day simple moving average filter. It looks for rising highs across the first, third, and fifth waves and specified higher corrective lows to identify a bullish pattern; the bearish rules mirror this with declining lows and corrective highs. A long entry requires the bullish pattern and a close above the moving average, while a short requires the bearish pattern and a close below it. Positions close when the opposite wave pattern appears.
The document presents the moving average as a way to filter trades and describes the approach as intended for medium- to long-term trading. Its published BTC/USDT futures backtest spans one month, but no returns, drawdowns, or other results are provided. The source uses a simplified pattern test based on recent bars, while the discussion acknowledges ambiguity in wave identification, false signals in sideways markets, and limited context from the larger wave structure. It proposes testing more filters and improving pattern recognition; the stated logic alone does not demonstrate trading performance.
Key ideas
- The strategy identifies bullish or bearish conditions from the relative highs and lows of a five-wave pattern.
- A long signal requires a bullish pattern and a close above the 200-day moving average.
- A short signal requires a bearish pattern and a close below the moving average.
- An opposite wave pattern serves as the exit condition.
- The published one-month futures backtest reports no performance measures, and the simplified wave rules are vulnerable to misclassification.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.