EMA-Filtered Trendline Breakouts with Pivot-Based Signals
Summary
This strategy uses a 200-period EMA to set directional bias, then looks for price to break a trendline drawn through two recent confirmed pivots. Long setups use descending pivot highs when price is above the EMA; short setups use ascending pivot lows when price is below it. Pivot points require five bars on each side for confirmation, and the line is limited to pivots in a 20-bar lookback window.
Stops are placed at the prior bar’s low for longs or high for shorts, with profit targets set at three times the stop distance. Position size can be based on a chosen fraction of equity and stop distance or on a fixed contract amount. The document describes this as a strategy design and gives a one-hour SOL/USDT futures backtest period, but reports no performance results. It warns that sideways markets can produce false breakouts, pivots may lag in extreme volatility, and gaps in low-liquidity instruments can undermine stops. The source also notes that EMA bias alone does not measure trend strength.
Key ideas
- The 200-period EMA determines whether the strategy searches for long or short breakouts.
- Trendlines connect the two most recent qualifying pivots within the lookback window.
- Pivot confirmation requires bars on both sides, which delays signal availability.
- Stops use the prior bar’s extreme, while targets are set at three times the stop distance.
- Risk-based sizing varies position quantity with equity and stop distance; fixed sizing leaves risk variable.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.