Trend Pullbacks, ATR Stops, and Compounding Risk Controls
Summary
This strategy combines a higher-timeframe trend filter with lower-timeframe pullback entries. It classifies the environment using daily price relative to an exponential moving average and recent momentum, then looks for pullbacks around a four-hour EMA. Candle direction, wick patterns, and price movement provide potential entry signals, while an ATR multiple sets the stop distance.
Position sizing is based on a percentage of current equity when compounding is enabled, with a cap on position size. The system also describes conditional leverage after cumulative gains in a bullish regime, staged stop adjustments as trades reach specified R multiples, a profit giveback limit, and daily loss and total drawdown circuit breakers. The supplied material consists mainly of parameters and source code; it provides no backtest results or performance evidence. Its aggressive risk settings and dependence on trend and candle signals warrant careful validation, including the effects of fees, slippage, and market conditions.
Key ideas
- Daily EMA and momentum readings classify bullish, bearish, or no-trade environments.
- Entries seek candle-confirmed pullbacks near a four-hour EMA.
- ATR-based stop distance informs position size, which can scale with current equity and is capped.
- Conditional leverage and staged profit protection are governed by gains measured in R multiples.
- The document provides no reported performance results, so the strategy’s effectiveness is unestablished.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.