A Three-Moving-Average Trend Strategy for DAX Five-Minute Trading

Summary

The author describes an automated version of a manual DAX day-trading approach on five-minute charts. It uses 20-, 180-, and 200-period moving averages to define trend alignment and slope. Long entries require the averages to be ordered upward, all three to be rising, price to cross above the short average with bullish price conditions, and ADX above 12. Short entries apply the inverse conditions. Positions use a stop at the 180-period average, with positions closed at the end of the day.

The author reports a backtest profit factor of 1.25 after spread and a manual-trading profit factor of 1.5, while noting that manual exits differ. The reported test covers only 2.5 years, is positive on the five-minute chart, and performs much worse on higher timeframes. These are author-reported results without further test details, and the limited sample and difficulty modeling trailing exits constrain how broadly the evidence can be applied.

Key ideas

• The strategy trades with the trend defined by the ordering and rising or falling slopes of three moving averages.
• Entries require a cross of the 20-period average, confirming candle conditions, and ADX above 12.
• The 180-period average serves as the stop reference, and positions are closed at the end of the day.
• The author reports a profit factor of 1.25 in a spread-inclusive backtest and 1.5 in manual trading.
• The test covers only 2.5 years and performs worse on higher timeframes; manual exits also differ.

Tags

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