Three Line Strike Trend Strategy with EMA Filtering and ATR Exits

Summary

This strategy combines the Three Line Strike candlestick pattern with an EMA trend filter. It looks for three consecutive candles moving in one direction followed by a larger candle in the opposite direction. A bullish pattern is considered only when price is above the EMA; a bearish pattern only when it is below. The stated ATR plan places take profit two ATRs from entry and stop loss one ATR away.

The document gives parameters for ATR and EMA lengths and publishes a two-hour BTC/USDT futures backtest window, but reports no performance results. The supplied code calculates exit prices from the current close and ATR when a signal occurs; it does not demonstrate that these levels are fixed from the actual fill price. Its exit orders are submitted alongside entries, so the implementation may not match a conventional entry-anchored risk plan. The accompanying discussion also warns that ranging markets, EMA lag, ATR multiplier choices, and candle timeframe can affect outcomes. No evidence establishes profitability or robustness across markets.

Key ideas

• The entry setup uses three same-color candles followed by a larger opposite-color candle.
• An EMA filter permits long signals above the average and short signals below it.
• The stated risk plan uses ATR-based profit and stop distances of two and one ATR, respectively.
• The published backtest settings identify BTC/USDT futures and a two-hour interval but give no performance statistics.
• The strategy may produce false signals in ranging markets and depends on timeframe and parameter choices.

Tags

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