EMA Trend Filter with Smoothed RSI Entries and Swing Stops

Summary

This strategy combines an EMA trend condition with a smoothed RSI trigger. It calculates RSI, smooths it with a simple moving average, and can signal entries when that smoothed value crosses configurable buy or sell levels. Signals are evaluated on confirmed bars, and the fast EMA must be above the slow EMA for both long and short signals as coded. Additional plotted moving averages provide visual context but do not affect entries.

For each position, the script places a stop beyond the recent swing low or high, adds a tick buffer, and enforces a minimum stop distance. A take-profit order is set using a configurable reward multiple of that risk distance. Optional chart boxes show the planned risk and reward areas, and alerts can report signals. Although the accompanying description recommends a one-to-one ratio, the code’s default is two-to-one. No backtest results are provided, and the setup’s performance depends on instrument, parameters, and execution costs.

Key ideas

• The strategy uses the fast and slow EMAs to define its trend condition.
• Smoothed RSI crossings of configurable thresholds trigger potential entries on confirmed bars.
• Stops use recent swing structure, a buffer, and a minimum distance; targets scale with stop risk.
• Chart boxes and alert conditions display trade levels and signal events.
• The description recommends a one-to-one risk-reward ratio, while the code defaults to two-to-one.

Tags

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