Fractal Signals with a Three-EMA Trend Filter and Fixed Exits

Summary

The source combines confirmed high and low fractals with a three-EMA alignment filter. It calculates exponential averages over 10, 20, and 100 periods, then defines bullish alignment when they rise in that order and bearish alignment when they fall in that order. Fractals require surrounding bars to establish a local high or low, so confirmation arrives after the turning point. The code also sets fixed profit and loss distances of 25 pips each, scaled by ten in its exit inputs.

There is a material mismatch between the prose and implementation: the code submits a short entry when its bullish alignment and up-fractal condition are true, and a long entry for the bearish condition with a down fractal. The document describes a short-term forex approach, while the published backtest settings specify BTC/USDT futures on Binance over a one-month period; no performance statistics are provided. Short-horizon trading is sensitive to fees and slippage, and the stated risks include false reversals and parameter instability.

Key ideas

• The strategy uses 10-, 20-, and 100-period EMAs to classify trend alignment.
• Local fractals identify turning points only after bars on both sides confirm them.
• The source appears to reverse the directional mapping described in the prose by entering short on its bullish condition and long on its bearish condition.
• The code specifies equal fixed profit and loss distances, each based on 25 pips and scaled by ten.
• The published test uses BTC/USDT futures despite the prose framing the method as forex, and reports no results.

Tags

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