Scored EMA Crossover Strategy with Volume and Risk Filters

Summary

This strategy uses 20- and 50-day EMA crossovers to set direction, then scores each prospective trade with trend alignment, MACD histogram, RSI, and volume conditions. A threshold determines whether to enter: the balanced setting requires three points, while conservative and aggressive settings use higher and lower thresholds. An ATR-based volatility filter can suspend entries when volatility is unusually high.

Risk controls include configurable stops based on ATR, a percentage, or recent highs and lows, plus a stated 2:1 reward-to-risk target and 2% risk per trade. The document reports higher win rates for higher-scoring signals and says volume confirmation reduces signal frequency while improving win rates. These figures are presented without details on the backtest sample, instruments, costs, or methodology, so they should be treated cautiously. The strategy is described as best suited to trending markets on daily or longer charts; sideways markets and short timeframes are identified as weak settings. The source code excerpt is incomplete, which limits independent assessment of the implementation.

Key ideas

• EMA crossovers establish the trade direction, while a five-point checklist filters entries.
• The checklist awards points for trend alignment, MACD momentum, RSI range, and above-average volume.
• The strategy supports multiple stop methods and a target based on the distance to the stop.
• The document reports stronger win rates for higher scores, but provides limited information to verify those figures.
• The approach is intended for trending markets and may produce poor results in sideways or very short-timeframe trading.

Tags

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