Larry Williams Three-Period High and Low EMA Exit Strategy

Summary

This document presents a short-horizon strategy using three-period exponential moving averages of bar highs and lows. It opens a long position when the close falls below the low-price EMA and closes that position when the close rises above the high-price EMA. The bands act as changing thresholds; the source leaves short entries commented out, so the implemented strategy is long-only. Its stated inspiration is Larry Williams’s trading approach, and the source calculates on each tick.

The published example uses BTC/USDT futures on hourly bars with fifteen-minute base data for a brief late-November to early-December 2023 window. It supplies no backtest performance measures, so its claims about responsiveness or usefulness are not supported by quantified evidence. The document notes that very short averages may generate false signals and respond poorly to sharp moves, and suggests longer periods, filters, or stop logic as possible adjustments. Because entry occurs below the low EMA, the method may behave like a countertrend entry; transaction costs and rapid reversals could matter substantially.

Key ideas

• The strategy calculates three-period exponential averages of highs and lows.
• It enters long below the low EMA and exits above the high EMA.
• The source implements long trades only; its short-trading code is commented out.
• The brief published futures test includes no reported performance evidence, and the short lookback may produce false signals.

Tags

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