EMA-Filtered Momentum Breakout with a Prior-Bar Stop

Summary

This document describes a long breakout setup intended to capture directional moves. It signals an entry when the current close exceeds the previous bar’s high while that prior high is below an EMA. The accompanying parameters set the EMA length to nine by default and the risk-reward ratio to two. The prose describes a stop below the previous bar’s low and a target based on the entry price and risk-reward ratio, with a trailing stop as an optional way to retain gains.

The source and settings provide a rule example and a backtest interval for BTC/USDT futures, but report no performance statistics. There are discrepancies between the description and implementation: the prose specifies a five-day EMA, while the parameter and code use a configurable EMA; it also describes target and stop levels in price terms, while the code passes calculated values to exit parameters named for profit and loss. The document itself notes false breakouts, sensitivity to stop placement, and the need to validate signals, for example with volume or higher-timeframe context.

Key ideas

• A long entry is triggered when the close exceeds the previous bar’s high and that high is below the EMA.
• The parameter list gives a default EMA length of nine and a default risk-reward ratio of two.
• The prose proposes a stop below the previous bar’s low and a target based on the prior bar’s range.
• No backtest performance results are reported, and the written rules differ from some source-code details.
• False breakouts and stop placement are identified as risks; volume confirmation and trailing exits are suggested for consideration.

Tags

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