EMA Trend Meter with Stochastic RSI Confirmation
Summary
The EMA Trend Meter combines the rate of change of three smoothed price averages with Stochastic RSI to summarize trend direction and momentum. Its example configuration starts with averages based on periods of 1, 7, 14, and 21, with the longer averages calculated from the shortest average. Positive rate of change colors the three trend lines green; nonpositive readings color them red. Stochastic RSI is calculated from the shortest average, then smoothed into K and D lines.
A long alert requires more than one of the three longer averages to have positive rate of change and K to be above D. The reverse conditions produce a short alert when a long state is active. Parameters, including price source and periods, can be adjusted. The document provides implementation logic but no market tests or performance evidence. It does not discuss transaction costs, whipsaws, position sizing, or risk controls, so the indicator's signals are not evidence of a profitable strategy.
Key ideas
- The indicator uses the rate of change of three smoothed averages to show trend direction.
- Stochastic RSI K and D provide a momentum confirmation condition.
- A long alert requires more than one positive average rate of change and K above D.
- A short alert uses the opposite conditions and follows an active long state.
- The document describes indicator logic but supplies no performance tests or risk-management rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.