ATR Retracement EMA Strategy

// This Pine Script™ code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © PineScript Development Framework

//@version=5
strategy("ATR Retracement EMA Strategy", overlay=true, margin_long=100, margin_short=100)

// Input parameters
atrLength = input.int(14, "ATR Length", minval=1)
atrMultiplier = input.float(2.5, "ATR Multiplier", minval=0.1)
emaLength = input.int(34, "EMA Length", minval=1)
retracementLookback = input.int(5, "Retracement Lookback Period", minval=1)
qty = input.float(1.0, "Quantity", minval=0.1)

// Calculations
atr = ta.atr(atrLength)
ema34 = ta.ema(close, emaLength)

// Detect strong moves (2.5x ATR)
moveUp = high - low > atrMultiplier * atr
moveDown = low - high < -atrMultiplier * atr

// Detect retracements after strong moves
// For long setup: price pulls back after an up move
// Check if we had a strong up move within the lookback period
recentMoveUp = false
for i = 1 to retracementLookback
    if moveUp[i]
        recentMoveUp := true

// Retracement condition for long: price is lower than previous bar but higher than 2 bars ago
retracementUp = recentMoveUp and close < close[1] and close > close[2]

// For short setup: price pulls back after a down move
// Check if we had a strong down move within the lookback period
recentMoveDown = false
for i = 1 to retracementLookback
    if moveDown[i]
        recentMoveDown := true

// Retracement condition for short: price is higher than previous bar but lower than 2 bars ago
retracementDown = recentMoveDown and close > close[1] and close < close[2]

// EMA crossover detection
crossoverUp = ta.crossover(close, ema34)
crossoverDown = ta.crossunder(close, ema34)

// Define buy/sell conditions
// Buy signal: 2.5x ATR up move -> retracement -> EMA crossover
longCondition = retracementUp and crossoverUp

// Sell signal: 2.5x ATR down move -> retracement -> EMA crossover
shortCondition = retracementDown and crossoverDown

// Execution
if (longCondition)
    strategy.entry("Long", strategy.long, qty=qty)
    strategy.alert("Long", strategy.long)

if (shortCondition)
    strategy.entry("Short", strategy.short, qty=qty)
    strategy.alert("Short", strategy.short)

// Plotting
plot(ema34, "EMA 34", color=color.blue)

// Plot buy/sell signals
plotshape(longCondition, style=shape.triangleup, location=location.belowbar, color=color.green, size=size.small, title="Buy Signal")
plotshape(shortCondition, style=shape.triangledown, location=location.abovebar, color=color.red, size=size.small, title="Sell Signal")

// Plot strong moves
plotchar(moveUp, "Strong Up Move", "▲", location.abovebar, color=color.green, size=size.tiny)
plotchar(moveDown, "Strong Down Move", "▼", location.belowbar, color=color.red, size=size.tiny)