EMA Trend Filters with Prior-Bar Breakout Entries and Risk Targets
Summary
This strategy combines four exponential moving averages (20, 50, 100, and 200 periods) with a one-bar price breakout. A long signal requires the close to be above every EMA and the prior bar’s high; a short signal requires the close below every EMA and the prior bar’s low. It can limit entries to one trade per direction each day and prevents long and short positions from being open together.
Stops start at the prior bar’s opposite extreme, and targets are set using a configurable risk-to-reward multiple. Optional trailing stops can activate after a specified profit threshold. The script also plots pivot-based swing support and resistance, but those levels do not filter its entries. The document recommends daily or weekly use and describes the rules, but supplies no performance results. Its claims about suitability for trending markets are not supported by reported tests; behavior may vary by instrument and timeframe, and the stated rules omit volume and session filters.
Key ideas
- Long entries require a close above all four EMAs and above the previous bar’s high.
- Short entries require a close below all four EMAs and below the previous bar’s low.
- Initial stops use the previous bar’s low for longs and high for shorts, with targets based on a configurable risk multiple.
- Optional trailing stops and daily per-direction trade limits modify trade management.
- Pivot swing levels are plotted as support and resistance but do not participate in the entry conditions.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.