Bitcoin Trend Trading with Three Moving Averages and ADX
Summary
This intraday system trades Bitcoin against the US dollar using three moving averages with different lookback settings to identify directional alignment. It also checks ADX-based strength before allowing a position, and uses stop orders to enter in the direction of the aligned averages. When the averages reverse, price comparisons against earlier bars act as an additional condition for closing and reversing a trade. The rules also restrict trading to a specified daily time window and define a fixed loss and profit target scaled by position size.
The author says the system is intended to participate in bullish momentum, reduce drawdown relative to holding Bitcoin, and take short positions during declines. The text reports a favorable experience during a minor crash, but gives no measured returns, drawdown figures, test period, or comparison methodology. It is a single anecdotal observation, and the rules depend on exchange, spread, time-zone, and execution assumptions. The document does not establish that the strategy generalizes or remains profitable after costs.
Key ideas
- Three moving averages provide the directional signal for Bitcoin trades.
- An ADX threshold gates whether the system takes a position.
- Stop entries, reversal conditions, and fixed loss and profit levels define trade handling.
- Trading is limited to a daily time window that must be aligned with the configured time zone.
- The author's favorable observation during a market decline is anecdotal and is not a full performance evaluation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.