Big Three Moving Average Breakout Strategy with MFE Trailing Stops

Summary

This ProRealTime strategy combines three moving averages with short lookback breakouts and a confirming candle pattern. For long entries, price lows must sit above all three averages and the high must reach the recent high; a sequence of declining then rising closes and a bullish candle must also occur. Short entries invert these conditions. Positions exit when price crosses the slow average, with optional fixed stop ranges, profit targets, time-based exits, and a trailing stop based on maximum favorable excursion. Position sizing can also be tied to account equity and a stated risk percentage.

The example is specified for the DAX 30 on an hourly chart and identifies several settings as optimized; it mentions an attached walk-forward analysis but supplies no results in the text. The moving averages are 20, 40, and 80 periods, while the breakout lookback and exit parameters are configurable. These choices are not evidence of robust performance. The author presents a translated implementation and invites modification, so code behavior, sizing assumptions, execution costs, and out-of-sample performance require independent review before live use.

Key ideas

• The strategy uses three moving averages to define directional conditions for long and short entries.
• Entries require a recent high or low breakout together with a confirming candle pattern.
• Optional exits include stop limits, profit targets, time limits, and an MFE-based trailing stop.
• Position sizing can use account equity and separate stated risk percentages for long and short trades.
• The example targets an hourly DAX 30 chart, but the document gives no walk-forward performance results.

Tags

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