Up and Down Candle Counts with EMA and Session Filters

Summary

This strategy estimates recent direction by counting how many closes rose or fell relative to the preceding bar over a lookback window. It considers a long when rising closes outnumber falling closes and price is above an EMA; it considers a short under the inverse count and price conditions. Signals are restricted to two configured trading sessions, and a state variable prevents repeating a signal in the same direction.

The document presents the approach as a simple trend-following filter, but supplies no measured performance results. Its published settings and backtest configuration describe a BTC/USDT futures test over roughly a month, without reporting returns or other outcomes. The stated caveats include unreliable counts in sideways markets, sensitivity to EMA and session choices, and exposure to event-driven gaps. It suggests testing other products and parameters and adding an ATR-based stop, but these are proposed extensions rather than validated improvements.

Key ideas

• The method compares the numbers of rising and falling closes over a lookback window.
• An EMA condition aligns long signals with price above the average and short signals with price below it.
• Trading is limited to two user-defined sessions, and repeated same-direction signals are suppressed.
• The document describes risks from sideways markets, parameter choices, session selection, and gaps.
• A backtest setup is provided, but no performance results are stated.

Tags

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