DEMA Trend Oscillator Strategy

📌 Overview
The DEMA Trend Oscillator Strategy is a dynamic trend-following approach based on the Normalized DEMA Oscillator SD.
It adapts in real-time to market volatility with the goal of improving entry accuracy and optimizing risk management.

⚠️ This strategy is provided for educational and research purposes only.
Past performance does not guarantee future results.

🎯 Strategy Objectives
The main goal of this strategy is to respond quickly to sudden price movements and trend reversals,
by combining momentum-based signals with volatility filters.
It is designed to be user-friendly for traders of all experience levels.

✨ Key Features

• Normalized DEMA Oscillator: A momentum indicator that normalizes DEMA values on a 0–100 scale, allowing intuitive identification of trend strength
  
• Two-Bar Confirmation Filter: Requires two consecutive bullish or bearish candles to reduce noise and enhance entry reliability
  
• ATR x2 Trailing Stop: In addition to fixed stop-loss levels, a trailing stop based on 2× ATR is used to maximize profits during strong trends
  

📊 Trading Rules
Long Entry:

• Normalized DEMA > 55 (strong upward momentum)
  
• Candle low is above the upper SD band
  
• Two consecutive bullish candles appear
  

Short Entry:

• Normalized DEMA < 45 (downward momentum)
  
• Candle high is below the lower SD band
  
• Two consecutive bearish candles appear
  

Exit Conditions:

• Take-profit at a risk-reward ratio of 1.5
  
• Stop-loss triggered if price breaks below (long) or above (short) the SD band
  
• Trailing stop activated based on 2× ATR to secure and extend profits
  

💰 Risk Management Parameters

• Symbol & Timeframe: Any (AUDUSD 5M example)
  
• Account size (virtual): $3000
  
• Commission: 0.4PIPS(0.0004)
  
• Slippage: 2 pips
  
• Risk per trade: 5%
  
• Number of trades (backtest):534
  

All parameters can be adjusted based on broker specifications and individual trading profiles.

⚙️ Trading Parameters & Considerations
Indicator: Normalized DEMA Oscillator SD
Parameter settings:

• DEMA Period (len_dema): 40
  
• Base Length: 20
  
• Long Threshold: 55
  
• Short Threshold: 45
  
• Risk-Reward Ratio: 1.5
  
• ATR Multiplier for Trailing Stop: 2.0
  

🖼 Visual Support
The chart displays the following visual elements:

• Upper and lower SD bands (±2 standard deviations)
  
• Entry signals shown as directional arrows
  
  

🔧 Strategy Improvements & Uniqueness
This strategy is inspired by “Normalized DEMA Oscillator SD” by QuantEdgeB,
but introduces enhancements such as a two-bar confirmation filter and an ATR-based trailing stop.
Compared to conventional trend-following strategies, it offers superior noise filtering and profit optimization.

✅ Summary
The DEMA Trend Oscillator Strategy is a responsive and practical trend-following method
that combines momentum detection with adaptive risk management.
Its visual clarity and logical structure make it a powerful and repeatable tool
for traders seeking consistent performance in trending markets.

⚠️ Always apply appropriate risk management. This strategy is based on historical data and does not guarantee future results.