EMA Pullbacks Filtered by ADX and CVD Proxy Divergence

Summary

This strategy waits for a bullish or bearish crossover of the 9-period and 20-period exponential moving averages, then looks for a pullback to either average. It requires ADX to exceed a threshold and a divergence condition in a cumulative volume delta proxy: bullish setups pair a price lower low with a higher proxy reading, while bearish setups pair a price higher high with a lower reading. A candle in the intended direction confirms the entry. Stops use the recent five-bar swing extreme, and targets are set at a configurable multiple of the entry risk.

The document supplies the indicator rules and executable strategy logic, but no backtest results or market-specific evidence. Its volume delta proxy assigns all volume according to candle direction, so it is an approximation rather than trade-level buyer and seller flow. The setup also depends on crossover, pullback, ADX, and divergence definitions, whose behavior may vary by instrument and timeframe. The displayed reward-to-risk parameter is configurable; the source does not establish that its default or any alternative is profitable.

Key ideas

• EMA crossovers establish a directional state and initiate a wait for a pullback.
• Pullbacks are accepted at either of the two moving averages.
• ADX strength and a price-volume proxy divergence must align before entry.
• Stops are placed at recent swing extremes, with targets scaled to the calculated risk.
• The document gives rules but no evidence of profitability, and its CVD measure is approximate.

Tags

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