EMA Breakouts Filtered by Candle Bodies and Wicks

Summary

This strategy uses a 14-period exponential moving average as a dynamic reference for long and short entries, with candle direction and wick proportions used to screen signals. A long entry requires a bullish candle crossing above the EMA, at least half of its body above the average, and combined wicks no longer than 40% of the candle. A short entry requires a bearish candle closing below the EMA after the previous candle’s low was above it, with the lower wick capped at 20% of the candle range.

The document explains the intended rationale and identifies sideways markets, EMA lag, price gaps, and parameter sensitivity as risks. It suggests volatility filtering, confirmation across timeframes, adaptive thresholds, and volatility-based position sizing as possible refinements. It provides implementation logic and published settings for an hourly BTC/USDT futures backtest spanning roughly one month, but reports no performance results. The written overview describes a short as a complete break below the EMA, while the supplied logic uses a close below it plus a prior-low condition; execution and exit rules are not developed in detail.

Key ideas

• The strategy uses a 14-period EMA as a dynamic reference for entries in both directions.
• Long signals require a bullish crossover, a substantial portion of the candle body above the EMA, and limited total wick length.
• Short signals require a bearish close below the EMA, a prior candle low above the EMA, and a restricted lower wick.
• Sideways conditions, EMA lag, gaps, and parameter sensitivity are identified as risks.
• The document proposes volatility filters, multi-timeframe checks, adaptive settings, and volatility-based sizing as refinements.

Tags

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