Supertrend and EMA Trend-Following Strategy with Percentage Exits
Summary
This strategy combines an ATR-based Supertrend with a 200-period EMA filter. It enters long when Supertrend turns bullish and price is above the EMA, and short when Supertrend turns bearish and price is below it. Percentage-based stop and take-profit levels are described, with positions also closed when an opposing signal appears.
The document provides parameter defaults and published backtest settings for BTC/USDT futures, but reports no performance results. It notes that sideways markets can produce false signals, the EMA may react slowly to reversals, and stops may not execute as intended during sharp moves. Performance also depends on parameter choices and market conditions. Suggested refinements include higher-timeframe confirmation, volume filters, adaptive stops, and walk-forward validation; these are proposals rather than tested improvements.
Key ideas
- Supertrend uses ATR-based bands to track changes in market direction.
- A 200-period EMA filters long signals to prices above the average and short signals to prices below it.
- The described system combines percentage-based exits with closing on an opposing signal.
- Sideways trading, lag, execution during sharp moves, and parameter selection are identified as risks.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.