EMA Trend and RSI Confirmation with ATR Stops and Targets

Summary

This strategy combines two exponential moving averages with the Relative Strength Index to define directional entries. It goes long when the fast average is above the slow average and RSI exceeds its threshold, and short when the averages and RSI indicate the reverse. New entries are allowed only while flat. The script plots both averages and sets stop and target prices using a multiple of average true range, with targets twice the stop distance from the current close.

The source specifies example indicator lengths, thresholds, ATR settings, and backtest assumptions for commission and slippage, but reports no performance results or market-specific evaluation. Although it labels a setting as risk per trade, that value is passed directly as entry quantity rather than calculated from stop distance and account equity. The ATR exit levels are also recalculated from each bar’s close, so they may move as price changes. These implementation details matter when assessing position risk and interpreting any backtest.

Key ideas

• The fast and slow EMA relationship defines the strategy’s directional bias.
• RSI above or below a threshold confirms long or short entries.
• Entries are restricted to periods when the strategy has no open position.
• ATR multiples determine the stop and target distances, with the target set twice as far as the stop.
• The displayed risk setting is used as quantity and does not itself calculate risk from account equity or stop distance.

Tags

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