Five-EMA Trend Pullbacks with RSI, ATR Stops, and Risk-Based Sizing
Summary
The strategy treats five ordered exponential moving averages as a trend channel. It looks for a pullback into that channel while RSI remains above a bullish threshold or below a bearish threshold, then enters when price crosses back through the fastest EMA. Long and short positions are both supported. Position size is calculated from a stated fraction of equity and the distance to an ATR-based stop; the design also specifies a fixed risk-multiple profit target and an optional Chandelier-style trailing stop.
The document gives parameter defaults and a published ETH/USDT futures backtest window, but supplies no performance results. Its promotional claims of steady profits are not substantiated. The code also has apparent exit-level issues: the calculated initial stop is not consistently used in exit orders, and the trailing levels are based on current close rather than a clearly retained extreme. These details make the intended risk controls uncertain in actual execution. Trend alignment and pullback rules can also generate false entries in choppy markets.
Key ideas
- Five EMAs define an envelope, with their ordering used to identify bullish or bearish alignment.
- RSI thresholds and a pullback into the EMA envelope qualify potential entries.
- A cross of the fastest EMA acts as the entry trigger after a pullback.
- Position sizing is intended to risk a fixed share of equity using an ATR-based stop distance.
- The specified profit target and optional trailing stop are not backed by reported test results, and the source has exit implementation concerns.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.