EMA Pullbacks with ADX and Proxy CVD Divergence

Summary

This TradingView strategy looks for pullbacks after a 9-period EMA crosses a 20-period EMA. It keeps a directional setup active until a qualifying signal appears, then requires price to touch either EMA, ADX to exceed its threshold, and a candle in the trade direction. The script uses a five-bar swing extreme for the stop and places a profit target at a configurable multiple of the entry-to-stop risk.

Divergence is estimated from cumulative volume signed by candle direction: bullish conditions pair a new price low with a higher proxy CVD low, while bearish conditions pair a new high with a lower proxy CVD high. The document provides rules and Pine Script, but no performance results or validation. This volume proxy does not use traded bid and ask volume, and the stated divergence checks compare lookback extremes rather than confirmed swing pivots. The strategy also does not specify a market, chart interval, or slippage assumptions, so its behavior and results would need independent testing.

Key ideas

• EMA crossovers set the long or short direction for a subsequent pullback entry.
• Entries require an EMA touch, ADX above a configurable threshold, divergence, and a candle in the trade direction.
• Cumulative volume is approximated by adding or subtracting each candle's full volume according to whether it rose or fell.
• Stops use recent swing highs or lows, while targets are set using a configurable risk multiple.
• The document gives no backtest evidence, and its CVD proxy is not true order-flow delta.

Tags

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