EMA + Williams Fractal Pullback [Trading Nerd]

9 Okt 2022

EMA Pullback Strategy with Williams Fractal Indicator
Backtesting script that searches for trends (long and short) and a following pullback into the EMAs. It enters on the first Williams Fractal in the desired direction. I found the Strategy on YouTube as a "M1 Scalping Strategy for Bitcoin".
Including fees the strategy is not profitalbe in lower timeframes (at least if not optimized). But it seems to work on higher timeframes as a swing traiding strategy.

Strategy Conditions
Longs:

• EMA 1 > EMA 2 and EMA 2 > EMA 3
  
• Number of <Candles outside EMAs> need to be above the EMA 1
  
• Then a Pullback into the EMAs is required
  
• Enter on the first bullish Williams Fractal
  
• Signal is canceled if the price closes below the EMA 3
  

Shorts:

• EMA 1 < EMA 2 and EMA 2 < EMA 3
  
• Number of <Candles outside EMAs> need to be below the EMA 1
  
• Then a Pullback into the EMAs is required
  
• Enter on the first bearish Williams Fractal
  
• Singal is canceled if the price closes above the EMA 3
  

Take Profit
A Risk Reward Take Profit is possible. If you want to use only a trailing Stop Loss, you can set the Take Profit to 'None'

Stop Loss
The default Stop Loss is EMA. If the Pullback has not reached the EMA 2, the Stop Loss is set to the EMA 2. If the Pullback has reached the EMA 2, the Stop Loss is set to the EMA 3.
Other Stop Loss types are available: ATR, HH/LL

Trailing Stop Loss
Available trailing Stop Loss types: ATR, HH/LL. Best practice is to also set the Stop Loss type to the same value.
The Stop Loss is updated if the value from the latest closed candle is greater/less than the previous value for a long/short trade.

Additional

• Time Filter: Only opens trade in the defined Session. Open trades are still being closed outside of the Session.
  
• Start Date/End Date: Limits the backtest for the defined Date Range
  
• Trading Days: Only open Trades on the checked Days
  
• Risk % per Trade: If enabled the Strategy uses X% of the capital (defined in Settings -> Properties -> Initial Capital)
  
• Use Compound Interest: If enabled Capital is recalculated for every trade (initial capital + net Profit)
  

IMPORTANT: For low Timeframes and Markets with tight SL (like Forex) it requires a lower Margin Percent than default. Go to Settings->Properties and lower the required Long/Short Margin. Otherwise Trades might not be considered because of too less capital/marign. Margins can e.g. set to: 2% (Forex), 10% (Stocks), 20% (Crypto).