A Long-Only Pullback Entry Using Moving Average Crossovers

Summary

The document describes a simple long-only strategy for the S&P 500, based on the premise that the broad index trend is upward and that short trades would target corrections. Rather than buying a fresh high, it seeks a pullback followed by signs of renewed strength. The coded entry combines a fast exponential average crossing above a slower one with the close below a short simple average, then buys at market when both conditions hold.

The example specifies daily data, a European time setting, a single contract position, and percentage stop-loss and profit-target levels. It provides no backtest results, sample period, transaction cost assumptions, or evidence that the entry conditions are profitable. The broad claim about long-term index direction is not substantiated in the document, and the fixed exit settings may behave differently across markets and volatility regimes. The example is best treated as a testable hypothesis rather than a validated strategy.

Key ideas

• The strategy takes long positions in the S&P 500 and frames short trades as correction trades.
• It waits for a fast exponential average to cross above a slower one while price is below a short average.
• The example uses daily data and enters at market when both conditions occur.
• It specifies a fixed position size, stop loss, and profit target, but reports no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.