EMA Trend Following with a Fast-Average Exit and ATR Stop

Summary

This long-only trend strategy compares fast and slow exponential moving averages, using defaults of 21 and 55 periods. It enters when the fast average is above the slow average and the closing price is above the fast average. An entry also places a stop three times the 14-period average true range below the close; an existing position is closed if price falls below the fast average. Published settings describe a daily BTC/USDT futures backtest with hourly base data, but the document does not provide performance results.

The approach is simple to parameterize and combines trend direction with a price confirmation and volatility-scaled stop. The source, however, tests whether the fast average remains above the slow average rather than requiring a fresh crossover, and the date-window function always returns true. The stated exit on a break below the fast average is described as a take-profit condition, though it may also close a losing trade. The text suggests adding filters, trailing stops, or multi-timeframe checks, while warning that lag and false breakouts can hurt performance.

Key ideas

• A fast EMA above a slow EMA defines the strategy’s long-side trend filter.
• The strategy enters only when price also closes above the fast EMA.
• An entry places a stop three times the 14-period ATR below the close.
• A close below the fast EMA exits an existing long position.
• The source uses a persistent EMA relationship and an always-true date function rather than the described crossover and date limits.

Tags

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