WaveTrend and EMA Pullback Breakout Strategy with ATR Exits

Summary

This long-and-short strategy combines a WaveTrend signal with a longer-term EMA trend filter, a shorter-term EMA pullback or reclaim, and a custom money-flow measure. For a long, price must be above the longer EMA, the WaveTrend conditions must align, the money-flow value must be positive, and price must cross back above the shorter EMA after a pullback, with a recent sequence of closes above it. Short conditions broadly reverse these checks. The source also offers ATR-based exits or an alternative based on recent lows or highs and a profit factor.

The document gives parameter defaults and a published backtest configuration for BTC/USDT futures over roughly a year, but supplies no performance metrics or result analysis. Its prose describes RSI filtering, while the code calculates a custom RSI/MFI-style series rather than a conventional RSI filter. The authors identify false signals, tight stops, trading costs, and parameter sensitivity as risks. Testing across markets and out-of-sample periods would be needed to assess robustness.

Key ideas

• The strategy aligns WaveTrend conditions with a longer-term EMA direction filter.
• Entries require a pullback and reclaim of a shorter EMA, along with a custom money-flow condition.
• Long and short signals use mirrored conditions, with ATR or recent-extreme exit options.
• The published BTC/USDT futures setup does not include reported performance statistics.
• The prose and source differ in their description of RSI filtering, so the implemented filter should be checked carefully.

Tags

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