EMA Crossover Trend Entries with ATR Stops and Profit Targets

Summary

This trend-following method uses a 20-period EMA crossover to time entries and a 50-period EMA as a directional filter. It enters long when price crosses above the short EMA while above the mid EMA, and short when price crosses below it while below the mid EMA. A 14-period ATR sets the stop distance, and the profit target is set at 1.5 times that distance. The document also lists a 100-period EMA and a fixed contract quantity among its parameters.

The source includes a daily BTC/USDT futures backtest configuration from December 2019 to December 2024, along with the strategy code, but gives no performance statistics. Although the prose presents the three EMAs as a coordinated filter, the code calculates and plots the 100-period EMA without using it in the entry conditions. The document identifies choppy markets, slippage, sudden reversals, and over-optimization as risks, and suggests volume or trend-strength filters and trailing stops as possible refinements. Its claims of broad potential stability are not supported by reported backtest results.

Key ideas

• Entries follow price crossovers of the short EMA, filtered by price position relative to the mid EMA.
• The stop distance is based on 14-period ATR, and the target uses a 1.5-to-1 reward-to-risk setting.
• The code calculates a long EMA but does not include it in the entry rules.
• The supplied backtest settings do not include performance results, and the document warns about whipsaws, slippage, reversals, and overfitting.

Tags

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