Liquidity-Sweep Entries with EMA Trend and ATR Exits

Summary

This swing strategy looks for price to move beyond a recent high or low and then close back inside that level, treating the reversal as a potential liquidity sweep. It filters long entries to prices above a long-term EMA and requires RSI above a threshold; short entries use the inverse trend filter and an RSI ceiling. Stops and targets are set from the entry bar’s close using ATR multiples, and the script plots the trend EMA and entry signals.

The provided script describes its rules but includes no backtest period, performance report, or empirical support for the interpretation of sweeps as accumulation or distribution. Its swing levels use a short rolling lookback, while the trend and momentum filters may still produce false signals. ATR-based distances adapt to volatility, but the document does not discuss fees, slippage, position sizing beyond a default percentage of equity, or validation across instruments and market regimes.

Key ideas

• A sweep is defined as a move beyond a recent swing level followed by a close back across it.
• Long and short signals are filtered by price relative to a long-term EMA and by RSI thresholds.
• Stops and targets are placed at ATR-based distances from the signal bar’s close.
• The script provides entry plotting but no backtest results or evidence of profitability.
• Position sizing, trading costs, and cross-market validation are not developed.

Tags

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