Trend-Filtered Scale-In Strategy Using Engulfing Zones

Summary

This strategy combines a 200-period exponential moving average, confirmed swing pivots, engulfing candles, and price zones to structure entries. Bullish setups require an engulfing candle after a recent pivot low while price is above the EMA; bearish setups use the corresponding pivot-high and below-EMA conditions. The candle range defines a zone that extends forward and can be consumed by a later price touch within a configurable time limit.

Entries are allowed in the direction of the EMA filter when price revisits the corresponding zone. Position size scales through a sequence of entries, increasing the equity allocation on later additions. The code excerpt shows the bullish and bearish setup logic, zone touch rules, and scale-in sizing, but ends before all order and exit behavior is visible. It provides no backtest results, and the delayed pivot confirmation, zone lifetime, and increasing exposure are important limits to evaluate before use.

Key ideas

• The 200-period EMA filters bullish and bearish setups by trend direction.
• Engulfing candles near recent swing pivots define potential mitigation zones.
• A later touch of an active zone can trigger an entry in the trend direction.
• The strategy increases allocation across successive entries in a position.
• The excerpt omits some execution logic and provides no performance evidence.

Tags

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