Filtering TEMA Crossovers with a Long-Term Moving Average

Summary

The strategy uses a long-period DEMA as a market filter and crossovers between short- and medium-period TEMA lines as entry signals. A cross of the shorter TEMA above the longer one prompts a long entry; a downward cross prompts a short entry. The document describes the DEMA filter as a way to avoid weaker crossover signals and presents the approach as suited to medium- or long-horizon trend trading.

The supplied parameters include a 200-period DEMA, 9- and 50-period TEMAs, and stop and target distances. However, the accompanying source calculates these averages with exponential moving average functions, and its filter requires price to be above the DEMA for both long and short entries. This conflicts with the general description of a DEMA/TEMA strategy and leaves the short-side logic questionable. The text warns of lag and reversal risk but reports no backtest performance, despite giving BTC futures test settings.

Key ideas

• A long-period average is intended to filter crossovers between short- and medium-period averages.
• An upward crossover signals a long entry, while a downward crossover signals a short entry.
• The published entry conditions require price above the long-period filter for both directions.
• The source uses exponential moving average calculations despite describing DEMA and TEMA.
• No backtest results are reported, and the short-side filter logic merits scrutiny.

Tags

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