Triple DEMA Alignment for Trend Following

Summary

This strategy uses three double exponential moving averages with short, medium, and long lookbacks to set long or short exposure. Its stated entry rule is for the fast DEMA to cross above both slower lines for a long, or below both for a short. The source code instead enters whenever the fast line is above or below both, so it describes alignment rather than requiring a fresh crossover. The configured price inputs also differ across the three averages.

The note argues that DEMA responds faster than a single moving average and that combining time horizons may filter signals. It identifies missed trades, lag during sharp moves, and difficulty in non-trending conditions as risks. Suggested refinements include tuning parameters, adding volume or volatility filters and other indicators, and using stops and position management. Published backtest settings specify BTC_USDT futures over a stated period, but no performance results are provided, so the strategy's effectiveness is not demonstrated.

Key ideas

• The setup compares DEMA values with lookbacks of 8, 20, and 63.
• The written rules call for long or short positions when the fast average crosses both slower averages.
• The source code checks whether the fast average is above or below both slower averages, without requiring a new cross.
• The note cites signal lag, missed opportunities, and non-trending markets as limitations.
• Parameter tuning, filters, stops, and position management are proposed as possible refinements.

Tags

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