Long-Only EMA Alignment Strategy with DMI, ADX, and Momentum Filters

Summary

This strategy seeks long entries when price and four exponential moving averages form a bullish order, from the shortest average through the longest. It adds trend-strength confirmation from ADX and the positive directional indicator, then requires the 20-period EMA to rise, recent rate of change to be positive, and that rate of change to be accelerating. The lengths and thresholds are configurable, and the script can display the averages, entry and exit markers, or a background regime color.

An open position is closed if price falls below the shortest EMA, the short averages lose their ordering, directional movement turns negative, ADX drops below its threshold, or rate of change becomes negative. The supplied strategy code contains no short-entry logic, fixed stop, profit target, or reported backtest results. The entry criteria combine several lagging and momentum measures, so their effectiveness and sensitivity to settings remain unestablished without testing across markets and costs.

Key ideas

• A long signal requires price and four EMAs to be ordered from shortest to longest.
• ADX and positive directional movement screen for directional strength.
• The strategy also requires a rising 20-period EMA, positive rate of change, and positive acceleration.
• An open position exits when selected EMA, directional movement, ADX, or momentum conditions weaken.
• The document provides no backtest evidence and defines no short-entry rules or fixed profit target.

Tags

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