Trend Following with ATR Stops, RSI, and Donchian Confirmation

Summary

This trend-following system combines an ATR trailing stop with an RSI direction filter and the midpoint of a Donchian channel. A long signal requires price to cross above the trailing stop, RSI above its midpoint threshold, and price above the channel basis; short signals apply the reverse conditions. Heikin Ashi-derived prices are offered as an optional signal input, and exits are defined as percentage-based profit and loss levels. The listed parameters cover ATR sensitivity and period, RSI period and source, channel length, and exit percentage.

The document gives BTC/USDT futures backtest settings spanning roughly a year, but reports no returns, drawdowns, or other measured outcomes. It warns that repeated signals may occur in sideways markets, confirmation can delay entries, and parameter choice can encourage overfitting. Although the strategy is described as non-repainting, its source requests price series with lookahead enabled for the purported Heikin Ashi calculation, making that reliability claim uncertain. The text recommends regime, volatility, volume, and timeframe filters as possible extensions rather than tested components.

Key ideas

• Long and short entries require ATR stop crossings, RSI confirmation, and price position relative to the Donchian midpoint.
• The ATR stop adapts to volatility, while percentage levels define profit and stop exits.
• Heikin Ashi-derived prices are an optional signal source.
• Sideways conditions can produce repeated false signals, while multiple filters may delay entries.
• The published backtest settings contain no reported performance evidence, and the source's lookahead setting complicates its non-repainting claim.

Tags

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