Trend-Aligned Pullback Trading with Moving Averages and MACD

Summary

This trend-trading framework combines moving-average positioning, a pullback filter, MACD confirmation, and volatility-based risk controls. It identifies direction by comparing the 20-period EMA with the 250-period EMA. In the stated long setup, the 2-period EMA is above the 300-period EMA but below the 100-period EMA, and MACD crosses above its signal line. The short setup reverses the average relationships and requires a bearish MACD cross. Stops use a multiple of ATR, and targets are derived from a preset risk-to-reward ratio.

The document outlines potential improvements such as market-regime filters, scaled exits, volume confirmation, and trailing stops. It includes a one-hour ETH futures backtest configuration but no reported results. There is also a mismatch between the prose and rules: the narrative describes price returning near a long-term average, while the listed conditions test the relative positions of several averages. The layered filters may reduce signal frequency; lag, parameter sensitivity, and a fixed reward ratio can also limit performance. The strategy should be evaluated across regimes and parameter variations before drawing conclusions.

Key ideas

• The 20/250 EMA relationship defines the stated long-term trend direction.
• Relative positions of the 2-, 100-, and 300-period EMAs create the pullback filter.
• A MACD crossover in the trend direction triggers entry after the filters align.
• ATR-based stops and a preset risk-to-reward ratio define protective exits and targets.
• The document gives no performance results and notes risks from lag, sparse signals, and overfitting.

Tags

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