DOGE Trend-Following Strategy – Balanced Risk & Trend (15m)

This strategy is designed to capture trends in DOGE/USDT, using a combination of moving averages and momentum indicators to filter high-quality trades. It is optimized for balanced risk management with a focus on reducing drawdowns through conservative position sizing.

How the Strategy Works
Exponential Moving Averages (EMAs):

A fast EMA (default: 50) tracks short-term price momentum.
A slow EMA (default: 200) represents the broader trend.
Trades are executed when these EMAs cross, signaling shifts in market direction.
ADX (Average Directional Index):

ADX (default length: 14) confirms trend strength.
The strategy only enters trades when ADX is above 25, indicating a strong trend. This helps avoid low-confidence trades during sideways markets.
RSI (Relative Strength Index):

RSI (default: 14) helps avoid trades during overbought or oversold conditions.
Long trades are exited when RSI crosses above 70, while short trades are closed when RSI drops below 30.
Multi-Timeframe Filter:

To further validate trends, 4-hour EMAs are integrated into the strategy, keeping entries in sync with larger market movements.
Performance Highlights
Net Profit: +$2,438.85 USDT (0.24% return over testing period)
Profit Factor: 1.136 – indicating more profit than loss overall.
Closed Trades: 35
Winning Trades: 62.86%
Max Drawdown: 0.58% – representing the largest equity decrease during the test period.
Trade Duration: On average, trades last about 40 bars (10 hours on a 15-minute chart).
Trade Setup
Long Entry:
A long position is taken when:

The 50 EMA crosses above the 200 EMA,
The ADX is above 25, and
RSI is above 30 (indicating healthy momentum).
The trade is exited when RSI hits 70 or price reaches a dynamic profit or stop-loss level.

Short Entry:
A short position is entered when:

The 50 EMA crosses below the 200 EMA,
The ADX confirms trend strength above 25, and
RSI is below 70 (avoiding oversold conditions).
The short position closes if RSI drops to 30 or stop-loss/take-profit criteria are met.

Strategy Parameters
Fast EMA Length: Default set to 50.
Slow EMA Length: Default set to 200.
ADX Length: Default set to 14 with a threshold of 25 for filtering trends.
RSI: Length is 14 with overbought/oversold thresholds at 70 and 30.
Dynamic Take Profit & Stop Loss: Configurable, allowing for risk customization.
Backtesting Conditions
Account Size: $100,000
Position Size: 2% of equity per trade – within the recommended 1-5% risk management framework.
Slippage and Commission: Set to realistic values to improve accuracy.
The backtest ran on DOGE/USDT over a multi-month period, showing reliable performance on the 15-minute timeframe. While past performance is not a guarantee of future success, the results suggest this approach may offer a robust framework for trend-following traders.

Strategy Notes
This updated version prioritizes sustainability by ensuring trades risk no more than 2% of equity. The combination of multiple indicators helps avoid whipsaws and improves long-term profitability. Always test strategies with your own data and market conditions before live trading.