TEMA Dual Moving Average Crossover for Short-Term Trend Signals
Summary
This strategy uses two Triple Exponential Moving Averages with different lookback periods to generate directional signals. The shorter TEMA crossing above the longer one opens a long position; crossing below opens a short position. An opposing crossover closes the existing position. The document explains TEMA as a triple application of exponential smoothing intended to reduce lag compared with EMA and simple moving averages.
The supplied example uses periods of 9 and 26, while the published backtest settings specify BTC/USDT futures from May 2023 to June 2024 on daily bars with a one-hour base period. No backtest performance results are reported, so the settings do not demonstrate profitability. The document warns that the more responsive indicator can produce false signals in volatile conditions and frequent trading costs, and that the strategy has no stop-loss. It suggests testing parameters, adding filters, and considering dynamic stops and trading costs.
Key ideas
- TEMA applies exponential smoothing in three stages to reduce lag relative to simpler moving averages.
- A short TEMA crossing above a long TEMA opens a long position; a downward cross opens a short position.
- Opposite crossovers are used to close positions.
- Responsiveness can increase false signals and turnover, and the described strategy lacks a stop-loss.
- The provided backtest configuration contains no reported performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.