Long-Only EMA and Bollinger Band Strategy with a Trailing Stop

Summary

This long-only trend strategy enters when the close is above a 40-period EMA and no position is open, subject to a re-entry state that can block a new trade after a take profit. The initial stop is placed at the lower Bollinger Band, calculated around the EMA. If price closes above the upper band while a position is open, the stop moves up to the EMA. A take-profit target is set using a 3:1 reward-to-risk ratio, and after that target is reached, the strategy waits for a close below the EMA before allowing a later entry.

The document explains the intended trend, volatility, and re-entry logic, and identifies risks such as false breakouts, range-bound conditions, wide stops, and fixed parameters. It provides a one-year ETH/USDT futures backtest configuration but no performance statistics, so its claims of stability or profitability are unsupported by reported results. The source exits based on closing prices and uses 10% of equity for position sizing; execution costs and behavior under live trading are not evaluated.

Key ideas

• The strategy takes long positions when price is above the 40-period EMA and re-entry is permitted.
• The lower Bollinger Band sets the initial stop, which can move to the EMA after a strong rise.
• A take-profit level is calculated using a 3:1 reward-to-risk ratio.
• After a take profit, price must cross below and later back above the EMA to reset entry eligibility.
• The document gives no backtest results, and fixed parameters may behave poorly in ranging or volatile markets.

Tags

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