Three-EMA Pullback Entries with Risk-Based Position Sizing

Summary

This BTC futures strategy uses three exponential moving averages to define pullbacks and trend direction. It enters long when price crosses back above the short EMA, provided the medium EMA and long EMA filters are met; short entries use the inverse conditions. The pullback’s extreme sets the stop distance, and position size is adjusted against specified per-trade risk limits. A take-profit target is set as a multiple of that risk, with the source using a ratio of 2.06 and EMA periods of 33, 165, and 365.

The document describes a backtest on Binance BTC/USDT futures using hourly bars and a 15-minute base period over about one month. It reports no performance results, so it does not establish profitability. Its narrative also simplifies some signal conditions, and the source’s risk bounds and entry checks require careful interpretation before reuse. EMA lag, false signals, stop breaches, and parameter sensitivity are acknowledged limitations.

Key ideas

• The short EMA marks the pullback level, while the medium EMA limits pullback depth and the long EMA provides a trend filter.
• Long and short entries occur when price crosses back through the short EMA after a qualifying pullback.
• The pullback extreme determines stop distance, which also informs position sizing under configured risk limits.
• The take-profit distance is set as a multiple of the calculated stop risk.
• The stated backtest setup gives no performance evidence, and EMA lag and parameter sensitivity remain concerns.

Tags

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