Improved EMA Trend + ATR Strategy with Arrows by AIScripts
By AIScripts
Performance Metrics
- Author: AIScripts
- Symbol: CBOE:NEBX
- Timeframe: 3 minutes
- Net P&L: +16.15 USD (+0.16%)
- Win Rate: 43.9%
- Profit Factor: 1.139
- Max Drawdown: 30.37 USD (0.30%)
- Total Trades: 148
Description
This strategy is built around a simple idea: strong directional moves often begin after periods of low volatility. Instead of chasing trends late, it waits for price compression and then trades the breakout when expansion begins.The approach combines volatility structure and trend alignment to reduce random entries.Core ConceptMarkets cycle between quiet phases and expansion phases.When volatility contracts, it often leads to a stronger move once price breaks out of that range.This strategy attempts to capture that transition.How It Works1. Volatility Compression DetectionA squeeze condition is identified when Bollinger Bands contract inside Keltner Channels.This signals reduced volatility.2. Squeeze ReleaseThe strategy waits for volatility to expand again.Trades are only considered when the squeeze ends.3. Breakout ConfirmationEntries occur when price breaks above or below the Bollinger Bands after the squeeze release.4. Trend AlignmentA long-term EMA is used to filter direction:Above EMA → bullish biasBelow EMA → bearish biasThis helps reduce counter-trend trades.5. Risk ManagementStop-loss and take-profit levels are based on ATR.This allows exits to adapt to current market volatility.A configurable risk-to-reward ratio defines profit targets.Key FeaturesStructured volatility-based entriesTrend confirmation filterATR-based dynamic risk controlCommission and slippage included for realistic testingNo repainting logicBest ConditionsThis type of strategy tends to perform better during:Volatility expansion phasesStrong directional marketsAssets that experience compression before breakoutsIt may underperform in slow, range-bound environments.Important NotesThis strategy is designed for research and backtesting purposes.Performance will vary across different markets and timeframes.Always evaluate across multiple conditions before considering live deployment.