Trend Following with EMA Alignment, MACD, RSI, and Volume Confirmation

Summary

This trend-following system combines four EMAs with MACD, RSI, volume, and recent price extremes. It identifies bullish or bearish conditions when the 5-, 14-, 34-, and 55-period EMAs align in order, then requires price to be on the matching side of the 34-period EMA, MACD histogram momentum to agree, and RSI to be above or below 50. Trades also require current volume to exceed 1.5 times its 20-period average. The code calculates rolling 20-period highs and lows as resistance and support references and plots them, but does not use those levels in its entry or exit rules.

Published backtest settings specify BTC/USDT futures on daily bars from February 2022 to February 2025, but the document provides no performance statistics. It warns that the approach can lag, generate false signals in choppy markets, and incur costs through frequent trading. The source contains entries for both directions but no explicit stop-loss, take-profit, or position-sizing rules, so the stated support and resistance analysis does not itself define risk exits.

Key ideas

• The strategy uses ordered short-, medium-, and long-period EMAs to identify trend direction.
• MACD histogram and RSI thresholds confirm directional momentum, while a volume surge is required for entry.
• Rolling 20-period highs and lows are plotted as support and resistance references but do not trigger trades in the source.
• The stated daily BTC/USDT futures test has no reported results, and the code specifies no explicit stop-loss or take-profit rules.
• The document identifies lag, choppy conditions, and trading costs as potential weaknesses.

Tags

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