EMA Trend Entries with Moving Average Exits and Stop Losses

Summary

This strategy uses a long-period EMA as a trend filter and a shorter EMA as an exit reference. It opens a long position when price is above the longer EMA while flat, then exits when price falls below the shorter EMA or breaches a fixed percentage loss threshold. A date filter is described as a way to constrain when setups are considered, though the published source sets its filter condition to always true, so the dates do not appear to affect its trading logic as written.

The document presents the method as a trend-following approach and notes that it can trade poorly in sideways or reversing markets, where repeated entries and exits may raise drawdowns and costs. It suggests adding indicators, volatility-based stops, and position sizing. The supplied BTC/USDT futures backtest covers about a year, but includes no reported performance results. The source also contains an optional lower-close exit input that is not used in its active exit condition, so the written description and implemented behavior are not fully consistent.

Key ideas

• Price above a long-period EMA is used as the condition for opening a long position.
• A close below the shorter EMA or a fixed loss threshold can close the position.
• The described date filter is not active in the provided source logic.
• Sideways markets can trigger repeated trades and increase drawdowns or costs.
• The backtest setup provides no performance statistics.

Tags

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