EMA Trend Alignment and Moving Average Bounce Filters

Summary

This direction filter describes three ways to screen potential buy and sell setups with moving averages. The Power Trend scenario requires fast, intermediate, and longer EMAs to be aligned in order; sell conditions reverse the ordering. The Medium MA Bounce scenario requires the 20-period EMA to be above the 50-period EMA and the candle to cross and close above the 20-period average. The Long MA Bounce scenario uses the same trend alignment but tests a candle’s interaction with the 50-period average. Sell conditions are described as the opposite of the buy conditions.

Each scenario has an enable switch and configurable moving-average periods and calculation methods. The descriptions provide rule conditions but no entry timing beyond those conditions, exit or position-sizing method, market or timeframe guidance, or empirical performance evidence. The filters therefore offer a way to classify trend alignment and pullback behavior, not proof that the resulting signals have an edge.

Key ideas

• The Power Trend filter looks for ordered alignment among three exponential moving averages.
• The Medium MA Bounce filter combines 20-over-50 EMA alignment with a candle testing the 20 EMA.
• The Long MA Bounce filter applies similar alignment while testing the 50 EMA.
• Each scenario can be enabled separately, with configurable periods and averaging methods.

Tags

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