The triple EMA breakout strategy is a quantitative strategy that uses the triple exponential moving average (EMA) indicator for trade signal generation. It produces trading signals when price breaks through the triple EMA and goes long or short based on the breakout direction. The strategy mainly aims to capture medium-short term trend changes.
Calculate the triple EMA with the formula: 3 x EMA(n) - 3 x EMA[EMA(n)] + EMA[EMA(EMA(n))]
Go long when price breaks above the triple EMA.
Go short when price breaks below the triple EMA.
Exit signals are generated when price breaks back below or above the triple EMA.
The triple EMA iterates on the single EMA for faster reaction to trend and turning points. It retains the trend following nature of EMAs while smoothing the curve.
The breakout validity depends on EMA parameter tuning, which can be adjusted for optimal trading performance.
Simple and direct triple EMA calculation
Faster response to price changes
Smoothed curve, effective oscillation filter
Easy trend direction identification
Adjustable parameters adaptable to market conditions
Potential price following lag exists
Prevent false breakouts
EMA parameter optimization required
Hard to determine trend duration
The triple EMA breakout strategy innovatively applies the MA indicator for unique advantages in capturing medium-short term trend changes. Excellent trading results can be achieved through parameter tuning. The strategy is worth backtesting, live optimization, and integration for application.
/*backtest
start: 2023-01-01 00:00:00
end: 2023-04-25 00:00:00
period: 1d
basePeriod: 1h
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/
//@version=2
////////////////////////////////////////////////////////////
// Copyright by HPotter v1.0 14/08/2018
// This study plots the TEMA1 indicator. TEMA1 ia s triple MA (Moving Average),
// and is calculated as 3*MA - (3*MA(MA)) + (MA(MA(MA)))
//
// You can change long to short in the Input Settings
// WARNING:
// - For purpose educate only
// - This script to change bars colors.
////////////////////////////////////////////////////////////
strategy(title="TEMA1 Backtest", shorttitle="TEMA", overlay = true )
Length = input(26, minval=1)
reverse = input(false, title="Trade reverse")
xPrice = close
xEMA1 = ema(xPrice, Length)
xEMA2 = ema(xEMA1, Length)
xEMA3 = ema(xEMA2, Length)
nRes = 3 * xEMA1 - 3 * xEMA2 + xEMA3
pos = iff(close > nRes, 1,
iff(close < nRes, -1, nz(pos[1], 0)))
possig = iff(reverse and pos == 1, -1,
iff(reverse and pos == -1, 1, pos))
if (possig == 1)
strategy.entry("Long", strategy.long)
if (possig == -1)
strategy.entry("Short", strategy.short)
barcolor(possig == -1 ? red: possig == 1 ? green : blue )