EMA Crossover Strategy with Trend Filters and ATR Stops
Summary
This strategy uses a fast and slow exponential moving average crossover to generate directional entries, with volume or short-term price direction as additional confirmation. A trend filter accepts conditions when ADX exceeds a threshold or the positive and negative directional indicators are sufficiently separated. The strategy can trade long, short, or both ways, and an opposite qualifying EMA signal closes the current position and opens the other side.
Risk controls combine a stop based on ATR and a maximum loss distance expressed as a percentage of entry price. The code selects the farther stop from the current price in each direction, which can make the resulting stop less restrictive than the tighter-stop description in the accompanying prose. The source also defines DMI reversal and flip settings but comments out their execution logic. The document provides rules and settings, not verified performance evidence; it advises testing on the target market, and the described suitability for liquid markets does not establish profitability.
Key ideas
- EMA crossovers provide the primary long and short entry signals.
- Volume or short-term price direction and an ADX or directional-indicator spread condition filter entries.
- Opposite qualifying EMA signals close a position and reverse direction.
- ATR-based stops are combined with a percentage stop, though the code selects the farther level rather than the tighter one.
- DMI reversal settings are present, but their entry and flip rules are commented out in the supplied code.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.