Moving Average Breakout Rules with Trend and Candle Filters

Summary

The document describes a long-side breakout setup using a hierarchy of exponential moving averages: the 20-period EMA above the 30-period EMA, and the 30-period EMA above the 50-period EMA. It also specifies that the breakout bar opens above the 30 EMA. A prior quiet range defines the breakout reference, with settings for the number of bars, minimum range in pips, and a breakout impulse threshold. The example impulse setting requires the breakout to exceed the quiet-range highs by at least 10%.

Additional filters concern breakout-bar wick proportion, minimum and maximum bar size, and whether its low reaches or falls below the 20 EMA. The text suggests optimizing the impulse multiplier across a range and tuning the wick percentage, then setting volume, lot size, stop loss, and profit target. Sell rules are described only as the inverse of buy rules. No market, timeframe, backtest, or performance evidence is given, so the rules are an outline requiring specification and testing before use.

Key ideas

• The long setup requires the 20 EMA to exceed the 30 EMA, which must exceed the 50 EMA.
• The breakout bar must open above the 30 EMA and clear a prior quiet range by a configurable amount.
• The setup filters the breakout bar using wick proportion, bar size, and its low relative to the 20 EMA.
• The document suggests tuning the impulse and wick settings and specifying volume, position size, stop loss, and target.
• It gives no tested results, timeframe, or precise definition of the quiet-range calculation.

Tags

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